I'm always on the lookout for ways to make extra money and save it all to invest. I mean, the whole point of this blog is to learn new ways to improve our financial situations, so it's always a work in progress and I'll always be open to new opportunities. Especially considering there are always new apps or offers being made over the years, I think it's important to keep an open mind when someone throws a recommendation your way.
In my opinion, it's a good idea to be cognizant of ways you can save money on the small things because they can really add up over time, and vice versa, if you're spending money instead on those small things you think won't make a difference. That's why I highly urge you to download the Coffee Habit worksheet in the sidebar if you haven't already.
When I used this method for the first time, I seriously became aware of my ridiculous spending habits. I realized I was throwing away over $1 million if I removed only 3 habits and invested that total over 45 years and received an average market rate of 7%. These 3 things for me were buying coffee before work and during lunch ($5 a day), buying lunch ( $10 at least a day) and taking the subway both ways ($5.50 a day).
Do the math yourself. Multiply each value by 5 for the working days of the week, then 48 to account for a very generous 4 weeks of vacation and reinvest that amount for 45 years at a 7% rate even WITHOUT dividends and you'll see how much it is.
Doesn't seem like it would get that high does it?
This is why I love saving and investing so much! The less work you do trading and guessing, the better off you are! Even the slightest amount saved can make a huge difference when you retire if you're diligent and stick with it through the highs and lows.
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With that being said, here are 15 ways to save money and invest the entire amount in an S&P 500 index fund over 40 years without including dividends reinvested with an average market performance of 7%:
Drink the coffee at your job
- $5 a day saved turns into $274,301
Buy a Thermos and coffee machine if your job doesn't have free coffee
- A Dunkin Donuts original blend 12 oz bag costs around $12 and produces around 62 9 ounce cups which roughly translates to 35 awesome stainless steel 16-ounce Thermos mugs
- These are my favorite, I had such a hard time finding this exact model in stores because it was always sold out
- At my first job and second job, there was no coffee at the office, so I brought this mug every day and it kept my coffee hot for 5 hours on the rare days I didn't finish it in 30 minutes
Get this Mr. Coffee machine if you absolutely can't stand the office coffee or even for the weekends
- You break even after less than 2 weeks! Kind of a no-brainer if you ask me
- My girlfriend and I finally replaced the first one we got after 4 years, it was definitely a solid investment
Do not buy bottled water, ever
- Now that I moved out and have to pay for stuff, I realize how much of a scam it is
- I forget which book I read it in, probably a Malcolm Gladwell book, but it said even Proctor & Gamble didn't think anyone would buy water you could get basically for free from the tap
- But alas, people flock to Costco to get cases of Kirkland bottled water
- That stuff is $30 – Let's say you bought a case once a month, that's $360 a year; over 40 years that could turn into $82,290
Or if you want to, buy a Brita pitcher
- If you really need the fresh feeling of water without the fluoride, go for it, it's only $27 with an Amazon Prime account
Make your own lunch
- If you read my About page, you'll see you can make $493,742 over 40 years from investing in an S&P 5oo index fund
Ibotta is an awesome resource to get cash back rewards when you purchase select products
- You can download the app on your phone
- All you have to do is own a device that uses it (so not a flip phone) and has either a Venmo or PayPal account
- When you see something you're interested in, you click on the “Earn $_” bar to see what the tasks are that you need to complete to earn the cash back after you get the product you want
- Some of the tasks include watching a short video, completing a survey, reading a fact, etc.
- When you purchase the products that qualify for the earned cash back, you need to show proof of your purchase
- Ibotta verifies the purchase and when you reach $20, you can transfer the money to your account
- Check out how Missie at the Crazy Coupon Chick made almost $2,500 in a year using Ibotta
- If you kept at this savings rate for 40 years it turns into $571,460 if invested
- It's a similar app to Ibotta where you can receive rebates on purchases
- You download the app, browse items and make purchases on whatever you want
- Use the app to take a photo of the receipt and get cash back
- Like Ibotta, you can cash out after you reach $20
- I'm not as familiar with Checkout 51, but I don't see why you can't aim for the same results earning you the same amount if you invest for the same length of time
- Everyone knows Groupon at this point or else you've probably been living under a rock
- I don't use it all the time, but hey it's nice when you realize some things are always on there for a great deal
- For example, I found this Groupon deal that has been on the site for the past 5 years even though it says it's ending soon
- If you live near the city, I highly recommend it, they give you a bottle of wine of your choice to take home at the end of the night it's awesome
- And that's after you have a wine tasting of 3 reds and 3 whites, two appetizers and two entrées for 2 people
- Some reviews complain the portions are too small, but they're really not it's great and you don't leave feeling stuffed
- And a bar called Auction House is right up the street, it's my girlfriend's favorite bar
- And for all you Rangers fans out there, the bartender told me, Messier, Leetch and Richter go there a lot
- We saved $130 each year we went, so that equates to roughly $10,487 after 40 years if annually reinvested in an S&P 500 index fund less dividends reinvested
- Like the app says, unlimited buy 1 get 1 free drinks at bars, clubs, and restaurants
- I think this means you can just do this once a night at a participating bar though, you can't get a free drink each time
- Say you go out in the city once a week and get a free drink
- In NYC that could literally be $10 a drink
- Twice a week, that turns into $20 saved, $1,040 a year
- Invested in an index fund for 40 years: $237,727
- This person earned over £1,000 in one year which equates to $1,390 right now
- Reinvested for 40 years in an index fund: $317,732
- This app solved my ongoing exhaustive efforts on retailmenot trying to find a code that applies to whatever I'm trying to buy
- The app is a plugin for your browser and automatically finds promo codes for you when you log onto a website you're interested in buying items from
- It's so nice, I can't even tell you how satisfying it is for me
- If you were diligent I'm just gonna estimate throughout the year you could literally save $1,000
- And that could turn into $228,584 after 40 years!
- It's a hit or miss with this place
- It depends on what they had in the main store the previous season and sent over to Nordstrom Rack
- Like one time I went to the location in NYC and there was nothing there for me
- Then I went to Route 10 in New Jersey and got a suit $200 off only because it was “out of season”
- NEVER BUY CLOTHES AT FULL PRICE
- I cannot emphasize this more, there's no reason to buy any clothes at full price, just be patient
- Always wait until there are sales or go to places like Nordstrom Rack or my next suggestion…
- The same idea, it's a hit or miss depending on the season and what exactly you're looking for
- My girlfriend spent $400 on designer glasses from Coach when she was in college since her mom was paying for them and not her
- When she finally needed new frames, I told her about Warby Parker and she got her next pair which is just as good for $100
- If you save $300 every time you buy glasses from them compared to expensive designer brands probably owned by Luxottica, over 40 years you could turn that into $16,359 if you assume frames last on average 4 years or so
Get rid of your cable bill
- I think it's insane when one of my friends tells me they still pay for cable
- You don't need to spend $200 a month on channels you never watch
- All I use is my parents' account for Netflix, their cable credentials for HBO Go and Showtime Anytime
- If I want to watch my soccer games, I use this awesome app called iGol that's $5/month if you pay annually
- Once I fully complete the transition to becoming a real grown-up human being, I'll have to pay for Netflix and HBOGo but for now, that's about it really
- Netflix basic: $8/month; HBO Now: $15/month; iGol: $5/month
- I'd be saving over $1,500 a year which turns into over $350,000 reinvested over 40 years
As always, let me know what you guys think and what else you recommend! And, obviously sticking with one saving method for 40 years is unrealistic.
I just want to show you how much of a difference it makes when you consciously make an effort to find more ways to save and invest when you're young. You'll be doing yourself a tremendous favor.
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