10 Terrifying Ways To Save Money

My 20-year old Army son and I have been talking about money. Specifically, he wants to know about all the stupid money decisions we made when we were his age—the brand new cars, the mortgage on a house we couldn’t sell, the three dogs at once. Why three?

This stuff makes him laugh. It makes me want to grind my teeth to nubs. Because even though we are financially sound now, I wish we had done some extreme things for our finances when we were his age. I wish we had adopted at least one terrifying, against-the-grain, no-one-does-that money saving habit.

Entrepreneur Kevin O’Leary (you’ve seen him on Shark Tank) proposes lots of these terrifying ways to save money in his new book The Cold Hard Truth on Men, Women, and Money: 50 Common Money Mistakes and How to Fix Them.

In addition to the usual advice to know where your money is going and to save 10% of what you earn, the guy has a lot of solid--but kind of terrifying--ideas that could really help young military members like my son. Would you adopt any of these practices? Would you advise someone else to do it?

(Check out some more middle-of-the-road practices from military families here.)

1. Don’t buy a car.

O’Leary advocates owning two wheels instead of four—especially when young. He likes Vespas and bicycles and public transportation and living within walking distance of where you work.

“Cars also constitute the single biggest money pit many of us own,” O’Leary writes.

If my son only hears one thing, I’d like him to calculate the cost of the car not only by the payment, but by the cost of financing, gas, insurance, parking, maintenance, license, registration etc. etc. Write that number on a piece of paper five times to show how much you will be spending over the next five years  Wow. That's a lot of money, ain't it?

2. Don’t get a pet.

You may have wanted a dog all of your life, but the truth is that they cost a fortune to purchase, feed, spay, inoculate, cure,  clothe and sent to the dentist.

“A pet is an expensive story with an expensive ending,” says O’Leary. He says you need to think of a pet as costing $12,000 over the lifetime of the pet.

3. Don’t go to college. Yet.

O’Leary points out that your college education is one of the most expensive investments you will ever make. Even if you are buying that education with GI Benefits so that it feels free, it isn’t free. Those benefits were earned the hard way and can be held in reserve.

“Going to college because you have nothing better to do, or just because your friends are going, is a foolish waste of money,” writes O’Leary. “Get serious about it or delay until you know exactly what you want to study, where you should go, how you’ll earn money when you’re there and how to increase your chances of getting a job when you graduate.”

4. Don’t major in Liberal Arts.

I know we are all told to major in what we love. My degrees are in Geography and Sociology, thanks. But O’Leary dares to say that you should major in something that leads directly to a J-O-B.

“Consider the kind of work you want to do when you graduate, because the cold hard truth is that for much of your adult life, you’re going to be working….and it better be something that’s going to make you enough money for you to be happy,” says O’Leary.

For military spouses, that degree needs to lead to a job where there is a lot of demand and is available in every state in the union. If your particular Liberal Arts degree will do that for you, then run with it.

5. Don’t get married.

Dating someone with a lot of debt? In love with someone who gambles or buys a lot of lottery tickets? Mad about a guy who may be a bit of a player?  Then live with them, O'Leary advises. Don’t get married.

From a strictly financial point of view, living together or signing a cohabitation agreement is a lot cheaper than a divorce. O’Leary’s rule of thumb is: Don’t marry anyone you’d be afraid to divorce.  My rule of thumb? Don't marry someone you are already thinking of divorcing.

6. Don’t buy an engagement ring.

In addition to the nine other terrifying ways O’Leary has not to overspend on your wedding (pick at least one, you’ll be glad you did), O’Leary suggests that you forgo the engagement ring.

Why spend two or three month’s salary on a ring when you are so young that you are barely making your rent? Instead, he says that you buy a big ring on your tenth anniversary along with some awesome golf clubs for your husband.

7. Don’t marry a gold digger.

You wouldn’t think soldiers, sailors, airmen, Marines or Coasties would be plagued by people marrying them for their money. Take a look at a pay chart, people. These young ones are hardly Mark Zuckerberg or Beyonce in cammo.

Yet there are people in the world who see them as a steady paycheck. O’Leary says you gotta watch out for people who have no discernible employment or goals in life beyond being available to you or constantly hint at things they’d like you to purchase or pay for.

8. Don’t buy a house.

Are you going to move within the next five years? Then don’t buy a house. Even though it seems like you are missing out by renting or living in housing, the harsh, cold reality is that buying a house in a market you don’t know that well is risky.

“Mobility erodes equity,” O’Leary points out. “ Every time you buy and sell a house, you’re losing at least 13 percent of its value to closing costs, real estate fees and land transfer taxes.”

Even if you can sell the house when you move, making enough to pay for those expenses doesn’t usually happen in the 2.5 years we military folks stay in one place. This is the one “terrifying” practice I wish we had adopted.

9. Don’t indulge in the baby trance.

You’ve probably read that the average cost of raising a baby to age 18 is about $200,000. Crazy! Especially crazy is the way new parents overspend on all the stuff a baby is supposed to need in his or her first year of life.

What would happen if you didn’t go on the $10,000 “consumer baby binge.” What would happen if you borrowed most of the stuff you needed for your baby or bought it used?

10. Don’t mix money and emotion.

O’Leary is famous for saying that money and tears don’t mix. He points out that we get into the worst trouble of our financial lives through emotional spending—especially when we lend money to friends or family. Instead he says that you never lend, you only give the amount of money you can comfortable afford never seeing again.

A skinflint lifestyle?

When I read back over this list, it looks like a bit of an anorexic life to me.  No marriage? No dog? No baby stuff? No car? No years spent reading and writing and talking about big ideas in class?  No sparkly engagement ring? What kind of life is that?

Some of the things we “wasted” money on I would do again and again—especially my Liberal Arts education I liked each of my majors and therefore I finished my degrees (which fewer than half of all students do). For the record, O'Leary's undergrad degree is in Psychology.

But I think most of the things that we bought would have worked out better if we made those purchases later. If we had just put off most of those purchases for a single year, it would have made a significant difference.

Thinking so far out of the box that you approach outrageous ideas is sometimes a good thing. What would you add to the list of things you would or would not do?



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