Why It’s Important to Be Frugal When Starting An Online Business

Dan “the Deadbeat” Brock here…

And one of the main reasons I’m able to successfully live this lazy, work 1 hour a day lifestyle…

Is because I’m good at living a frugal, minimalist entrepreneurial lifestyle.

It wasn’t always like this.

In fact, I had to go through the experience of buying 2 Porsches (A Black 2002 911, and a 1990 928 GT) & a Mercedes Benz to realize that buying “things” was a complete waste of money and energy.

See, no matter what I was doing, on the back of my mind I’d always be worrying about my cars.

I’d say that 10% of my brain power was spent passively worrying about them!

And when I realized I was really only driving the cars 2-3 times a year, I decided it was time for them to go.

So over the last few months I’ve been simplifying my life significantly.

I sold my 1990 928 GT, and all the expenses related to it!

Go Through Your Personal and Business Expenses Regularly!

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It’s extremely crucial to go through your expenses both personal and business about once every 2-3 months.

What I do is make a list of every recurring charge that hits my credit cards, and enter that data into an Excel spreadsheet.

Then, I systematically go through the list 1 by 1 and see what I can do to either eliminate it, or reduce it as much as possible.

I know it’s common sense, but are you actively doing this?

Even small $5-$10/m charges add up.

Think of them as your profits slipping away.

The way I look at it, is it’s easier to reduce your expense by $100/m, then to start or tweak a new campaign to produce an extra $100/m.

Your expenses are like guaranteed CASH MONEY!

Some Of The Expenses I Was Able to Reduce.

Over the last 3 months I reduced my current overall business and personal expense down to roughly $1800/m!

Here are some of them:

Business Expense Reductions

Mailing list services – these were at roughly $250/m, I got them down to about $60/m by removing all people who haven’t opened emails from me in more than 365 days!

Web Hosting – I was paying a combined $300/m between HostGator hosting plans, cloud service, and Amazon S3. I went through and scaled down some services, and cancelled a couple hosting plans. I’m now down to 2 HostGator plans, and my $50/m Softlayer cloud! Hosting expense is under $100/m now!

Domain Names – I had over 150 domain names I was paying $13/year for. Domain names actually represented a big portion of my expense, but because I was only paying $13/year for each one, it was hard to wrap my brain around how much money I was actually spending on these per year. So what I did was went through my account and deleted ALL domains that weren’t currently earning me money. I went from 150 domains down to 10. Some of the domains I literally paid $300-$500 each by buying them in auction so I was really attached to those. Those were a hard decision to get rid of, but I decided that since I haven’t done anything with them in the last 2-3 years of owning them, I might as well drop them!

Software – I was spending big money on monthly software subscriptions from Adobe and other sites. I managed to reduce this down from about $350/m to $30/m! I bought some one time fee software to replace the ones I was using, but all in all I ended up saving a lot!

Internet – I was able to reduce our internet bill from $80/m down to about $50/m by dropping down from 50mbps to 25mbps. I notice absolutely no difference in speed.

Personal Expense Reductions

Cell Phone – Went from $100/m to $30/m by switching from a Verizon data plan to a prepaid call/text only plan. I hardly use my phone anyway, so this turned out to be easy money.

Cable TV – I decided to get rid of cable TV all together, for a savings of $50/m. Now instead of watching TV (complete waste of time), I read self improvement books!

Gym Membership – I like to workout, but at this point in life I’ve focusing on building my online business back up. I reduced my Jui-Jitsu membership down from $190/m to $150/m.

Car Insurance – Was able to completely get rid of my cars for a monthly savings of around $250/m. My house is located in the center of town where I can literally walk to everything I need. Life is simple, and great!

Eating Out/Going Out – Over the last 10 years, this has been by far my biggest expense. I looked over my taxes the last 5 years and have spent close to $100,000 in POST TAX money on eating out/going out. A stopped drinking about a year ago, and am now focusing on reducing the amount I eat out/get carry out.

Why I Decided To Slim Down

So back in 2010-2012 I had A LOT of month expense between employees and personal expense bloat.

The stress of it all was too much for me to handle.

So I decided then that I was going to trim all the fat off of everything.

Sure, I’m making a little less money overall, but right now in life I prefer simple and stable vs. complex and chaotic.

This year I’m gearing up for a big expansion, but this time I’m not going to have STUFF to worry about!

What This Means For You:

Like I said before, ALWAYS be on top of your expenses.

The best way to do this is to learn to do your own books.

This way you get good at getting receipts and structuring your life around tax write offs… and also have the ability to keep an eye on every single monthly expenditure you have!

Get too it! See what you can shave off your monthly expenses.

-Dan “The Deadbeat” Brock

Images sourced from pixabay
1)https://pixabay.com/en/calculator-the-hand-calculate-count-428294/

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