Tuesday, February 13, 2018

How to Save Thousands of Dollars Now

When I first started along my path to financial freedom I became very good at saving money and finding new ways to save money. You don't have to make a lot of money to retire early. You simply just need to save a good portion of your income. I see a lot of people who make a lot of money, but end up spending most of it anyways. Who cares if they make more money than you if you can save just as much? 



I found that there are an endless amount of ways to save money, but there are a few things that are really powerful and I wanted to go over a couple here.

1. Make your breakfast/lunch/dinner
This may be hard for some people to do, but it really does add up. I've done the calculations before and my breakfast is around $1 every morning, my lunch is around $3-4 every day and my dinner is also around $3-4 every day. I would say I eat pretty well too and have a good amount of fruits and vegetables. This all adds up to around $8 a day. Food is the easiest thing to change. If you could even just bring your lunch a few days a week then this will really add up.

Just one meal out for lunch or dinner can easily run you $10+ a day. If you compare my $8 a day with someone who averages around $22 a day then you get a $14 difference. Lets multiply this by 300 days because I don't always make every meal. 

Potential savings:  $4,200 a year
This assumes a $14 a day difference compared to someone who eats out once or twice a day. This could even be higher as food costs some people closer to $30 a day. Think about this over a couple years and you are looking at a large sum of money.

It may be hard to make your own food, but there are so many benefits to it. You will end up eating much healthier and you will save a lot of money. You can also save a ton of money on groceries if you shop at low cost places such as giant, harris teeter, and trader joes. We get a lot of free coupons just for being part of their member program which is free to join. We have also found that any Buy One Get One deal at Harris Teeter is actually buy one half off. This can end up saving you a lot of money. 

2.  Get rid of your car (or get a cheaper, gas friendly car)
This could also be hard for people to do. I'm not advocating you get rid of your car because you may need it. I have a car, but it is a 2006 Honda Civic with 90k miles on it. I've had the car since 2006 so it is fully paid off. My car insurance is only $45 a month and maintenance and gas costs are very low at this point. 

If you have a car that isn't paid off yet then you are probably paying around $300-400 a month plus another $100 or so a month for insurance. If you can afford to completely get rid of your car or settle with a cheaper car than you could potentially save yourself around $400 a month. 

Potential Savings:  $4,800 a year

3. Move Somewhere Cheaper
The three biggest expenses are rent/housing, transportation, and food. These may not always be the easiest things to change, but even just a little change goes a long way. Our rent would be considered very high at $2,360 a month. We live in a highly populated area with a ton of jobs. The salary makes up for it a little, but we understand that if we move somewhere else we could end up saving a good amount of money. We are looking at moving this upcoming fall to try and save around $200 a month. 

A tip for trying to save money on rent is by moving in the off months. During the Fall/Winter rent usually goes down or they usually offer free months of rent. If you can set up your schedule to sign a lease in those months then you can score some big savings. 

Potential Savings: $2,400 a year (This could be huge if you could move somewhere much cheaper) 

4. Join Free Rewards Programs/Use Coupons
The amount of free stuff/discounted stuff we get is incredible. Join every reward program you can and make sure you ask if there are reward programs. Once you sign up make sure to put in your birthday, because they will send you free things on your birthday. 

I probably received around $100 of free stuff on my birthday just because I was signed up for their rewards programs. I even got a free month of bagels from Panera and I'm still not sure why they did that. 

Grocery stores tend to give some great deals out for their members as well. Every Saturday we tend to get anywhere from 1-3 free items from either Harris Teeter or Giant. They do this almost every Saturday and all you have to do is join their free member program. 

There are tons of good rewards programs out there and I can provide a thorough list of the ones I use if you guys are interested. 

A good example is OpenTable. This is an app that allows you to make reservations at restaurants. The app is free to use and you collect points for every reservation you make. Now it may take some time, but once you collect 2,000 points (100 pts per reservation) they give you a $20 gift card. 

Potential Savings: $1000-2000 a year (harder to calculate, but if you use the rewards programs and coupons effectively then you can earn a lot of free stuff)

5. Get a credit card with a good rewards program
I will write a post about how to use credit cards effectively, but if you get a good credit card with a good rewards program then you can essentially travel free a lot of the time. Your points that may be worth $100 can be used for $200 worth of travel. This is why its always better to use them for travel as opposed to giving yourself cash back. 

I really enjoy all of the Chase cards and would recommend just about any of those to anyone looking to get a credit card. Considering how often you may need to travel you can end up saving a lot of money. 

Potential Savings: $1000-2000 a year (will depend on how you use your points)


These are probably some of the biggest ways to save money. There are hundreds of other ways, but these are some of my favorite and most utilized ways. The total potential savings per year from these five items is around $14,000 a year

Want to retire early? This would be a huge step in doing so. If you could free up this amount of money and invest this in dividend growth stocks over a couple of years then you would be on a fast track to retirement. 

I've learned that people don't like making changes or they think it is too hard to change. One of the ways I've worked around that is making many smaller changes instead. I'm not saying you should stop eating out every day, but maybe start with only eating out 4 times a week instead of 5 and work your way down to 1 or 2. 

If you can make many small changes then they really add up to a much bigger change. This potential savings could have you retiring 5-10 years early. Wouldn't it be worth it to be able to cut your retirement age back by that much? 


Let me know what you think! What other ways do you guys like to do to save money?
 

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