There are lots of ways to save a little extra scratch, but if you can, little sacrifices can add up to a considerable amount of cash. If you can save $100 a month and hold onto it, that’s $1,200 annually. What you do with that $1,200 is up to you? Save it? Invest it? Pay down debt? Spend it on something fun?
Some may question, $1,200 doesn’t sound like a lot…but here’s a couple of examples for perspective. If you had invested $1,000 in Tesla in 2011, that would be worth over $100,000 today (Tesla Investment Article from Yahoo! Finance). If you had invested $1,000 in March of 2012, it would be worth over $7 Million today (Bitcoin Return Calculator). Depressed yet?
Now, there are countless other opportunities that didn’t pan out as well. But just think, by doing some simple things and some small sacrifices, you might have the ability to reapply those savings into creating wealth opportunities for yourself. $1,000 in the right place, can turn into something special.
Coffee (or soda or any other drink we might “overpay” for)
64% of Americans drink coffee everyday (almost 400 million cups) (Some US Coffee Stats). If you buy that daily coffee from your local Starbucks or D&D, then you might be spending about $2.50-$3.00 for one regular brewed coffee. Certain locations in the US might be more and if you do a specialty coffee you’ll likely see that spike up a bit. 5 days a week and you’re talking nearly $15 a week (if you’re only buying 1 per day).
If you brew your own you can harvest savings by brewing a pot that you can pour from throughout the day. And if you like capsules, there are discounted options out there where you can get a significant savings per cup. It might mean a little bit of a sacrifice on that daily coffee or drink dream, but if you’re saving with focus and reapplying that money, then that sacrifice may well be worth it!
Cut Out That Expensive “Bad” Habit
OK, perhaps it’s not a bad habit, but one of choice, etc. But let’s assume that you might smoke cigarettes or go out drinking at the bars or clubs more often than might be “healthy”. Look, Im not one to judge, but here’s some facts.
According to tobaccofreelife.org, the cheapest cost of a pack of cigarettes in the US is $5.25 in Virginia whereas the priciest is in NY at about $12.85. A 1 pack a day smoker in VA will spend nearly $2,000 a year on cigarettes while a New York State smoker might spend as much as $4,700 a year. If someone could cut their consumption in half (rather than cold turkey even) that would be nearly $100 - $200 a month in savings…Cold turkey and you’re saving even more). Add in potential long term health savings, savings on your insurance costs, and the numbers get event better.
Similarly, if one is going out and getting a bunch of mixed drinks at the clubs, you might be looking at $10-$15 per drink. Cut back one a week and you’re looking at $40 - $50 a month right there.
Financially, the reduced consumption or change in behavior might be worth it. Sure you may not see it right away, but if you are saving for something specific, it might very well be enough of a motivation to make some of these sacrifices.
When times were a little harder in the pandemic, I had to break my habit of buying a movie each week. Sometimes that was $10 or sometimes it was $25 depending on the movie. But we needed to make cuts. It also helped justify a subscription to STARZ for $5 a month more or less. I still had access to movies, but I wasn’t spending as much each week. It may not sound like much, but at the time it was a tough sacrifice for me - I love to watch movies. But it helped put $50-70 a month back in our pockets.
Canceling Unwanted or Forgotten Subscriptions
It seems like more and more companies are changing their product pricing models to subscription based. Pay for the year or pay by the month, each of these subscriptions can really impact your monthly budgets. How many do you truly need? How many are you using? If we go through and look at our monthly and annual automated charges we might indeed find a bunch of expenses that we simply don’t need.
There are some apps that are coming out now that help with this as well as some great features in already existing platforms to manage your app / software subscriptions. Apple’s App Store allows you to easily see what subscriptions are coming up for renewal and you can cancel them within the Apple Store rather than having to cancel with the App provider. Truebill.com is also marketing itself pretty aggressively at the moment. It apparently will connect to your bank account and help identify monthly costs and subscriptions along with other financial goals like reducing bills, etc.
Are you currently employed somewhere that matches your contributions to your retirement account in “any way”. For example, some corporations have matching programs up to a certain limit where if you contribute 5% of your earnings to a retirement savings plan, they will match that amount. That could be hundred(s) of dollars a month that you save yourself, BUT also hundreds that they contribute. And over time, that could equate to great things in your retirement accounts.
I know it can feel like an impossible feet at times to find a way to make that contribution, but try to remember - where else can you make a 100% return on your money immediately? That’s FREE money!
If your employer offers a match, you need to really try to figure out ways to get the maximum match. And while the money may be sitting in a retirement account and not immediately accessible, free money doesn’t happen all that often. A little inconvenience and smart budgeting can really be a great way to get that retirement account moving in the right direction!
If you are carrying credit card debt and paying interest charges or other fees, consider working with a financial adviser or bank rep to come up with a plan to right the ship. Every month you pay that interest fee, is basically paying money for something you can’t use.
Sometimes we need to incur some debt to get something that is important, but over time that interest is a killer. If you can right the ship and make the credit card payments in full each month, you’ll be spending wisely but also be in a position where you avoid paying significant interest charges each month. If you can accelerate debt payments on a mortgage and pay off your mortgage ahead of time you may also find yourself savings thousands of dollars in interest expenses.
Here’s a fun calculator you might be able to use to calculate how much you might save by sacrificing a little now in order to pay off debt faster.