When our family started getting serious about saving for an early retirement, we knew decreasing our spending was a key part of the plan. At first, this seems daunting. Could we really make a meaningful dent in our spending? Would small changes really add up?
The encouraging answer is yes!
Regardless of your financial situation or goals, it is powerful to know that small changes do make a difference.
It starts with a simple exercise…
The process is simple. For each and every expense (yes, ALL of them!) ask yourself:
1) Do we really need this expense? (…Really?)
2) If yes, is there a way we can reduce this expense?
By simply auditing our expenses – and having a conversation about each expense – we made some simple but very powerful changes.
Small Changes, Big Savings
Here are some of the simple changes we made in the last year to increase our savings.
This change was hard to pull the trigger on – especially for my sports-loving husband. We still pay for Netflix, we have an antenna to watch football, and we usually find a way to stream soccer matches. And guess what? We don’t miss cable at all!
- Monthly Savings: $90
- Annual Savings: $1,080
- 10-Year Savings: $10,800
Changing Cell Phone Carriers
Previously were paying ~$170/month for two cell phones – an amount that now seems ridiculous.
Mr. Saver now exclusively uses his work cell phone and I changed cell phone providers from T-Mobile to Republic Wireless. My cell phone bill is now $20/month.
- Monthly Savings: $150
- Annual Savings: $1,800
- 10-Year Savings: $18,000
Moving (The Big Change)
We moved 30 miles to be closer to work. The move was a big, emotional decision, but it has helped us save money in so many direct and indirect ways (and, life is pretty effin awesome in our new home!).
In the short-term, our mortgage loan payment is more expensive than it was. However, this is because we opted for a 15-year loan rather than a fixed 30-year. We were paying ~$1,700/month. Now we are paying ~$2,500/month.
The savings are in the long-term. By moving, and by selecting a 15-year mortgage loan (vs. a 30-year), we are saving ~$114,000 over the course of the loan! The indirect expenses are harder to quantify. We are closer to work, family, friends, and many activities we enjoy.
We have become more conscious about our energy and water use, so I am curious to see how this translates to our utility bills. We just started tracking this, so the savings are TBD.
- Monthly Savings: TBD
- Annual Savings: TBD
- 10-Year Savings: TBD
Saying Bye Bye to Car Payments
Because of our move, Mr. Saver now bikes to work. As a result, we no longer need two cars. Heck, we hardly even need one except for longer trips. We will return our leased Nissan Leaf this month – eliminating a $267 a month car payment. We will save ~$120 a month on insurance.
- Monthly Savings: $387
- Annual Savings: $4,644
- 10-Year Savings: $46,440
Shopping Around for Insurance Policies
Speaking of insurance, we audit all of our insurance policies (health, car, home, etc.) annually. Get new quotes, ask friends, shop around. Sometimes we find savings, other times we find we have the best policy for our needs.
Spending Less on Food
By not eating out regularly, monthly meal planning, making basics from scratch, and not buying as many processed foods we cut our food bill in half – from $1,500 a month to about $750 a month. It takes a bit more organization, will power, and planning, but the savings are huge!
- Monthly Savings: $750
- Annual Savings: $9,000
- 10-Year Savings: $90,000
Working Out at Home
After we moved and Mr. Saver started biking to work, his Crossfit gym was no longer on the way to work. Additionally, the membership fee was pretty high at $190/month. For us, the solution was to buy a home gym for our garage. It was a larger upfront expense ($2,400), but it will pay for itself in a year. And, the whole family can use the equipment and it is less time away from the family for Mr. Saver. Bonus!
- Monthly Savings: $0
- Annual Savings (The First Year): $0
- 10-Year Savings: $20,520
I’m sure there are many more examples – such as reducing kids items, clothing, and discretionary spending – but I think you get the idea.
Many of these changes seem small, but over the course of the year – and over the course of a decade – these small changes create big savings.
In these examples alone, we’ve found an additional savings of $16,524 annually, or $185,760 over ten years… Even more if you add in interest gained on these savings.
Change is powerful, yet difficult
We often want different results, but we don’t want to change our daily behaviors.
Sometimes in life, the big goals – and big changes – seem daunting. But before you start listening to all the voices saying no, remember the power in simply starting, having a road map, and making small changes (and sometimes, a few big ones too).
What changes – big or small – are you making to save money? I’d love to hear from you! Leave a comment below.