Some days it seems like it's impossible to save any money at all. If you've ever gone on a bender with friends and wake up the next morning only to see your checking account become a shell of its former self, then yea, you know exactly where I'm coming from. Damn you Boardy Barn and your sneaky cheap beers.
Your monthly credit card bill comes in and you're like, “holy crap how did I even spend that much!?”
But after trial and error, if you work at it, you find your groove and pick and choose the selective times to go out and not feel bad about spending money.
I'm not saying you have to live like a monk all other days, but it's nice to let loose every so often just to blow off some steam and not get burnt out from saving so much that it backfires and you end up going on a shopping spree in consecutive days.
That's what helps me at least.
- 66% of Americans are Losing Hundreds of Thousands of Dollars
- What's Better For You a 401k and IRA or a Roth 401k and Roth IRA?
I work on my blog during weekends and don't go out most of the time, but the few times I do, I make sure I have fun with my friends without worrying about pinching pennies. Nobody likes when you do that anyway, you're just gonna be a huge drag. But even when I do go out, I still make sure I save over 30% of my salary every month.
Here are the ways I save over 30% of my salary each month:
Having payments automated like my dry cleaning, cable bill, etc. allows me to never get away with overspending before I need to pay the bills. My girlfriend and I schedule the cable bill on the 15th so it gets paid as soon as we get paid. My dry cleaning obviously depends on when my bag gets full, so that varies, but as soon as it's dry cleaned, I get it charged right away and the money gets taken out from my account. Even psychologically this makes me not want to spend money on frivolous things like an iced coffee that's always overpriced or an expensive sandwich in the city. You never want to be caught without having enough to pay the bills.
Automating my 401k contribution
The most important thing you need to understand is that you need to pay yourself first before anything and anyone. Even the government! Unless, if you have a Roth 401k, then, by all means, pay the government first so you don't get taxed when you actually have millions of dollars. Always make sure no matter what job you take, that you set up a direct deposit for your 401k contribution. At first, you might think it'll be too tough to live on less money, but before you know it, you'll forget what it felt like to even have that extra $300. If you want to get rich and have financial freedom, you need to pay yourself first above all else. Save more and invest more.
Making my own lunch
You guys already know how I feel about this by now. You could literally save $5 a day by making your own lunch. That's $1,200 a year or $493,741.50 if reinvested for 40 years at an average 7% rate. Literally just from making lunch at home. You don't need to go to Chop't to buy that $15 salad, that's insane. Even if it's $10 that's still insane. And not for anything, who knows what even goes on behind the scenes when you order lunch. Yea sure, you see them making your salad in front of you, but how's that food being stored at night? After working in the kitchen of a restaurant for literally only 4 hours one day when I was 17, I called it quits. I saw enough. It made me not wanna eat out for a month. Save your money and save your health, you'll be better off.
Making dinner instead of eating out on weekdays
This is one of the biggest mistakes I see my friends make. They'll literally order something on Seamless or GrubHub almost every night. And their orders come out to be like over $20 each night including tip. My girlfriend spends on average around $400 a month on groceries. That seems like a lot but considering we eat in almost every night, that comes out to be about $20 for the both of us combined for 20 days! That's $10 per person each night. Eating out is literally 100% more expensive. Why even bother when you're not gonna be any happier eating out when you can make your own food? Even if it's just yourself, that's $2,400 a year you could save and turn into $548,601.67 over 40 years in an S&P 500 index fund.
Rarely ever eating out on weekends
We also hardly eat out on weekends. Other than the times we plan to go out with our friends and get the late night munchies from being out all night, we rarely go out. But you can't blame us for eating late at night when there's The Halal Guys, I mean what else are we supposed to do?
Other than that though, we hardly go out and to us, there's just no need, we don't feel like we miss out on anything. When it's just my girlfriend and me when it's nice out in the summer, maybe once a couple of weeks we'll go to a place down the street from us. And even there we always spend less than $40 when we eat outside in their beer garden area, it's great. If you eat out, especially in New York City, that could easily cost you $50 a weekend at least. If you saved that and ate in that could save you like $40 52 times a year. That's $2,080 a year that can turn into $475,455 if reinvested every year in an S&P 500 index fund.
Buying generic labels when I can
A lot of people don't realize you can save a ton buying generic. If you look up the ingredients next to a brand you're familiar with, you'll see not only are they the same ingredients, but they're in the same order and the same percentage of dosage for medicines too. Next time you're in a Walgreens or a CVS look for the generic version of DayQuil and see how much cheaper it is, it's insane. Face wash and toothpaste too. We save probably around $20 every month. Sure $240 doesn't seem like much, but over 40 years that compounds into $54,860. And it's not just this, but that $54,000 added to everything else is what really makes the difference. All of your good spending habits put together is how you save and invest for the big bucks.
Walking/riding a bike to work when I can
Take advantage of the opportunities when you don't have to rely on mass transportation or your car to go to work. Hell, even Mr. Money Mustache rides his bike in town so he doesn't have to use his car. I walk the last 13 or so blocks to work and back ending up saving $5.50 a day or $1,320 a year. Saving that much and investing it all in an S&P 500 index fund for 40 years gets me $301,731. And I also end up walking 6.5 extra miles a week. Boom.
Never going on shopping sprees and always buy clothes when they are on sale throughout the year
This is honestly one of my biggest pet peeves. I hate when people go shopping just for the hell of it and pay full price for clothes. It's seriously one of the most stupid things you can do. Under no circumstances should you pay full price for clothes! Who cares if what you have on is from last year? I either wait for Black Friday, go to Nordstrom Rack, Saks off Fifth , or my favorite place to get shirts for work, Charles Tyrwhitt (still not sure how to pronounce that).
Seriously, I get 3 shirts for $99 dollars from their Memorial Day Weekend sale every year now. Usually, a shirt is $100, so I end up saving $67 on it. One time I went to a place in Chelsea and bought 3 nice work shirts that were originally $199 each and got them on sale for $45. I probably save on average around $500 a year from not paying full price on clothes. That's $114,292 over 40 years invested in an S&P 500 index fund.
Taking transportation that allows me to save money vs the alternative
For me, this means taking the PATH train instead of NJ Transit. If I really wanted to, I could take NJ Transit. But not only is it just God-awful, it's literally exactly twice as much for traveling the same distance. I'm not even kidding, I looked it up before I moved. The same exact miles but you need to pay $5.50 instead of $2.75 one way. I save $660 a year. That turns into $150,865. Always pay attention to alternative transportation, it might be cheaper for you.
Washing my own clothes instead of having a delivery laundry service do it for me
Okay so maybe this isn't an option for you if you don't have a washer and dryer in your apartment or house. If you do, it would be crazy to send your clothes out to get cleaned and folded if you have the resources to do it yourself. Sure it takes up some of your time, but I would rather save a few dollars on this than give them up. It's not gonna make a massive difference in the long run for your net worth, but for me, it helps make the difference for my monthly savings rate.
Using a savings account to place money into for short-term payments
I love doing this because as soon as I get paid, I immediately separately a huge chunk of my paycheck from my checking account for my rent. I usually try to put in I'd say over 90% of my paycheck from the middle of the month into my savings so I'm not tempted to buy pizza if I've had a rough day or a sausage egg and cheese sandwich. I literally spend nothing all month during the week since my girlfriend pays for the groceries and I buy my subway card at the end of the month. It really helps prevent me from spending money if I do this.
Getting my health checked at work when they offer it for free to get a better rate on my health benefits
Every year in July, my company offers a free physical to check your health to get a lower rate on your insurance. You can get a lower rate because by opting to get your health checked and showing you're in good health, depending on your results, you could save a significant amount of money, especially depending on your age when you're older. I save I think about $50 more because of this, it's great. Even that $600 a year turns into $137,150 over 40 years at 7% in an S&P 500 index fund. Not bad!
What are some things you do to help yourself save more in order to allow yourself to invest more?
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