The easiest way to make sure you have more month than money is to cut down on your expenses.
Trust me, I know how NOT exciting it is to look at your budget and find more expenses to cut back on.
That being said, it can be very exciting and worthwhile when you make one phone call and end up saving $1,020 over the course of the year.
I do spend the great majority of my time working on making more money and building up new streams of income but one must never ignore their expenses. If you do, the next thing you’ll know, is that your expenses are running wild like a heard of wildebeest across the Serengeti.
So, how do you save more money? Luckily for us, there are lots of great strategies and tips to save more money that have been shared by fellow personal finance bloggers:
- The “Stranger Test” by Zee from Work To Not Work
- The “Urgency Test” by J Money from Budgets are $exy
- The “Walk It Off” method by Donna at Surviving and Thriving
- The “Sleep On It” method by Grayson at Debt Roundup
I wanted to add one to this list as there has been one method that I have used, rather successfully, for a while now. I’d like to introduce…
“The Olive Method”
The inspiration for this saving method comes from the brilliant change that Robert Crandall, the CEO of American Airlines, made when he realized that 72% of passengers weren’t eating the olives in their salads back when airlines used to serve food during flights.
Crandall knew that AA was being charged by the number of items in their salads and he saw an opportunity to make a small change that could result in a massive cost savings for the airline.
A salad with four ingredients would cost $0.60 each and a salad with five ingredients was 33% more with a cost of $0.80. By removing the olives from the salad, AA was able to serve a salad with four ingredients rather than five, which saved them roughly $500,000 per year.
An Example Of How I Used “The Olive Method”
The most obvious way that you can use this method to save yourself money is to remove one item from your salads that you make at home or when eating out at one of those places that weighs your food to determine the cost.
Please promise me, that you won’t stop there.
I like to extend this savings trick to virtually everything I buy.
For example, the other day I was shopping for some new clothes at Banana Republic. After trying on a bunch of new shirts and jeans, from the sale rack that was 40% off, I decided that I was going to buy five new shirts and a pair of jeans. Amazingly, they were all within a few bucks of $25 each.
While I was waiting in line I wasn’t allowing myself to get distracted by the “shiny objects” they strategically place within arms reach in hopes you’ll buy an extra item (which is the exact opposite of the olive method by the way). No, I was busy trying to decide which item was going to be my olive. The one that I was going to cut out from my purchase.
When I got to the counter I had chosen the unlucky shirt that wasn’t going to come home with me that day. I told the employee that I had changed my mind on one of the shirts and I left Banana Republic that day with four new shirts and a pair of jeans for around $125. The olive method saved me $25 in this example.
Other Ways To Use “The Olive” Method
You can almost use this method anywhere and on anything. Of course, like most things, this isn’t a one-size-fits-all. I would recommend against using this when you’re looking at things like insurance, healthcare and such.
This method works great when:
- Buying clothes
- Buying music / movies / other forms of entertainment (only bowl two games instead of three as an example)
- Buying groceries. Of course, don’t starve yourself to follow this method but when you’re checking out take a good look at what you’re about to buy and see if you can cut out an item or two. My suggestion, start with anything processed or full of sugar.
- Buying a home. Just think about how much you’ll save buy buying one less bedroom or bathroom than you “really want”.
- Buying a car. Here’s your chance to cut two things out… opt for the 4-cylinder rather than the 6-cylinder.
- The list can really go on and on
Obviously, there are some scenarios where the olive method won’t work.
Such as, date night at the movies when you’re buying you and your honey tickets to the show. I’m sure your relationship won’t last long after you tell your sweet one “sorry, your ticket was “the olive” tonight”. I suggest you make an items at the concession stand your olive in this scenario.
Movie nights are out, but you can use this saving tip during so many purchases and it’s important not to overlook how small changes can add up over time. Just remember, one small changed saved AA $500,000 per year.
What do you think about “The Olive” method? Do you think that it will help you save money?