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Posted 07/25/2021 in Family Finance

3 Key Savings Levers that Everyone Should Know to Save Money

3 Key Savings Levers that Everyone Should Know to Save Money

3 Key Savings Levers that Everyone Should Know to Save Money

If you are seriously interested in saving money—whether to pay down your debts or to save more to make a down payment on your first house or to save more to live more comfortably in retirement—the following  two lists of 3 Key Savings Levers and the 14 Ways & Methods to Save Money might help you on this journey.

In this article we'll focus on the 3 Key Savings Levers in a bit more detail and in our post 14 Ways and Methods to Save Money we dive into more details around methods, tools, and resources you could use to save as much as money as possible.

Table 1:  Top 14 Ways and Methods to Save Money


Ways and Methods to Save Money

Why Money is Saved?


Price Comparison

Lower Price per Unit with same Volume


Price Discounts & Coupons

Lower Price per Unit with same Volume



Lower Price per Unit with same Volume


Retail vs. Wholesale

Lower Price per Unit but with more Volume


Cash Back

Lower Price per Unit with same Volume


Trade Brand for Private Label

Lower Price per Unit, similar product or service


Trade Quality for Price

Lower Price per Unit, similar product or service



Lower Price per Unit, different product or service


New vs. Used

Lower Price per Unit, but product not new



Lower Price per Unit, but more time spent doing it yourself


Unbundling & Decomposition

Lower Price per Unit with same Volume


Trade Time for Price

Lower Price per Unit, but for a different time period


Volume Reduction

Same Price per Unit, but with less Volume


Total Cost of Ownership Comparison

Lower Price per Unit


Before reading about the 14 ways and methods to save money we first wanted to share another helpful and very important list of three things which represent a fundamental basis for the 14 money-saving methods above.  We call them 3 Key Savings Levers.

When we make any purchasing decision in lifewhether we buy groceries, a house, a car, or decide on a wireless service or an auto mechanic we'd useconsciously or subconsciously we all make a decision on these 3 Key Savings Levers:

  1. Amount of stuff
  2. Quality of stuff, and
  3. Price per Unit of stuff.

Let's consider these three in a bit more detail.

3 Key Savings Levers

When reading through the list of 14 Ways and Methods to Save Money here it might be helpful to know that the savings methods on that list are all about these 3 Key Savings Levers that can be "pulled" to generate savings:

  1. saving on the Volume (or Quantity) of the stuff you buy, 
  2. saving on the Quality of the stuff you buy, or 
  3. saving on the Unit Price that you pay for the stuff you buy.

When thinking about saving money for you and your family, you can change one or several of the above 3 levers.

You can:

  1. Buy less Volume (or fewer Units) of whatever you buy, and/or
  2. Buy Units of a different Quality (and "quality" in this case has a pretty broad meaningsee in more detail below), and/or
  3. Pay a lower Price per Unit for the same or lower number of Units of the same or lower Quality.

Figure 1:  3 Key Savings Levers

Let's consider each one of these three levers in more detail to demonstrate their practical application.

Volume, Amount, or Number of Units We Buy

Whenever we buy anythinghouses, food, gasoline, movie tickets, cell phone service, or anything else for that matterthe amount or quantity of all these products and services are measured in various "units."  Here are some examples:

Table 2:  Units of Measurement Examples for Some Stuff We Buy

Stuff We Buy

Measurement Units


Square Feet (Sq.Ft)

Electricity for the House

Kilowatt-Hours (KhW)


Ounces (Oz), Pounds (Lb) or Kilograms (Kg)


Fluid Ounces (FlOz), Gallons (Gal) or Liters (L)


Pieces of clothes or Pairs of shoes


Carats (ct) for diamonds and Troy Ounces for gold

Cell phone services

Minutes (min) and Megabytes (Mb) per month

Internet services

Speed in MB/second

Movies / events tickets

Number (#)


Gallons (Gal)

Well, you get the gist.

So, when planning to save or working on saving moneyone of the considerations should always be reducing the Amount of Units that we buy or already own.  For example, if we wanted to reduce our Housing expenditures (the highest expenditure of any American household)instead of buying (or owning) a house the size of, say, 6,000 square feet, we should consider buying (or downsizing to) a house of "only" 3,000 square feet.

Quite often one Savings Lever (like the number of Square Foot units of the house in the example above), will automatically help reduce a whole bunch of other "units" as well.  For example, if we downsized from a 6,000 sq. ft. house down to 3,000 sq. ft. onewe would automatically pay less in:

  • Real Estate Taxes:  the smaller the house, the smaller the tax bill
  • Electricity:  the smaller the house, the less room to cool down or warm up
  • Lawn Care:  the smaller the house, possibly, the smaller the lawn to mow
  • Furniture Cost:  the smaller the house the fewer rooms and the less room to furnish, etc.

Figure 2:  Downsizing from a 6,000 sq.ft. to 3,000 sq.ft. Home

To learn more about different ways to drastically reduce your Housing expenses, read our article on typical housing expenditures and key ways to save money on this, American families' biggest expenditure (How to Save Money on Housing, American Families' Biggest Expenditure).

In other examples, if we were to drink less soda, buy fewer number of meals at a restaurant, buy fewer wireless phone minutes, or buy smaller diamonds or emeralds, in all these examples we'd basically reduce the Volume, Amount or the Number of Units we buy and thus save money.

Quality We Buy

The word "Quality" in this case has a much broader meaning than simply "good quality" vs. "bad quality."  All products and services we buy have varying:

  • Tastes and Textures
  • Packaging types
  • Attributes and Characteristics
  • Features and Functionality
  • Designs
  • Brands, etc.

So, by "quality" we mean any and all of the above.

One of the more interesting product examples in which "features" and "attributes" are primarily based on perception, marketing, and branding is bottled water.  Companies such as Nestle, Coca-Cola, the Wonderful Company, and others managed to convince consumers that all these waters are so different that they can sell one premium type of water at twice the price of another.  For example Voss sells for 8.2 cents per fluid ounce while Perrier, also a premium product, sells "only" for 4.4 cents per fluid ounce.  Compare this to Walmart's private brand Great Value Purified Drinking Water priced at 0.7 cents per fluid ounce, which is 7 times less expensive than Perrier and 12 times less expensive than Voss.

Figure 3:  Bottled Water Side-by-Side Price Comparison (cents/fl. oz.)

To start saving money one of the most important considerations should always be looking at and comparing products and/or services and asking ourselves these questions:

  • Features and Functionality:  "Do we really need all these bells and whistles, especially at this price?"
  • Brands:  "Is a store brand the sameor even betterquality for lower price?" or "How critical is it for me to wear brand A, which is 5 times more expensive than a similar quality brand B?"
  • Packaging:  "Is this fancy packaging that important for me, or can I simply buy the same thing in a simple, practical packaging and save a ton of money on something I'd throw into the trash anyways?"
  • Designs:  "Is it worth paying twice as much for the 'cooler' design or a simpler and less expense one would do?"

Price per Unit We Pay

The third Key Savings Lever is Price per Unit that we end up paying:

  • Price per square foot when buying a house
  • Price per pound when buying groceries
  • Price per gallon when buying gasoline
  • Price per ticket when taking our kids to a Disney theme park, etc.

Price is usually a reflection of three things:  (1) Quality (which we briefly discussed before), (2) Quantity (do we buy 1 chocolate bar at the register or a 12-pack inside the store) ,as well as (3) Where we buy.

Why is "where we buy" important?  For example, exactly the same stuff in Walmart, Costco, or on Amazon could have a significantly lower price than at Publix, Fresh Markets, or Whole Foods.  Or a house in district A could cost twice as much per square foot as the same size house in district B.

So, now that we know which 3 Key Savings Levers we should always think about, and compare and contrast, before making a purchase decision let's jump straight into the 14 Ways and Methods on How to Save Money.

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