The idea of retiring young is not new, although it may seem impossible if you're juggling student loans or other debt while also trying to save for things like buying a home or starting a family. Perhaps the idea of traditional "retirement" in the sense of stopping work altogether and playing golf all day is not particularly motivational, but how about just having the freedom to choose how you spend your time without concern for a paycheck? The Early Retirement Extreme movement offers ideas like living in an RV or abstaining from "extras" like shopping, vacations, and sporting events, and that might work for you. Others may want to live a more "mainstream" lifestyle but still have that dream of at least cutting back on work before the more traditional retirement age of 65. Here are some ideas to cut a few corners and save more without having to feel like you're making an extreme change.
1. What does getting rid of excess stuff have to do with saving money?
First of all, you may be able to sell some of that stuff. I find my neighborhood Facebook Swap & Sell to be a great place to monetize unwanted stuff.
Second, take an inventory of how much square footage in your home is dedicated to simply storing excess stuff. Then divide your monthly rent or mortgage payment by the total square footage of your home and multiply that by how many feet you think your stuff is taking up. That's feasibly how much you could save if you adopted a more minimalist mindset and moved to a smaller place.
2. Audit your automatic subscriptions
Magazines, meal prep services like Blue Apron, personal stylists like Trunk Club or Stitch Fix, your gym, etc.—some of these fees may seem minor on their own, but in aggregate, they could be costing you in excess of $300 per month. Even if these are things you use, are you getting the full value you're paying by being on auto-pay or auto-renew? Consider switching to a pay-as-you-need plan, like buying a package of 10 classes or only renewing magazines you actually read cover to cover each issue.
3. Pay your insurance in full up front
Yes, it makes it easier to budget for car or property insurance to pay your coverage monthly, but insurers charge a fee for that convenience, typically $5 or more per month. It seems minor, but as a percentage of payment, you could be paying almost 10% more than paying in full one time per period. Let's say you pay $100 per month for car insurance when your 6-month premium is $550 or $91.67 per month. It doesn't seem like a huge markup, but paying the premium in full would save you $100 per year or 9% of the cost.
4. Cut the cable cord
This is a tough one for my husband because he is a huge NFL fan and didn't think he could live without the NFL channel. But when we took a look at how many games we actually watched at home each season, he saw that it wasn't worth it. On those 2 or 3 Sundays that he wants to watch a game we can't get on local TV, we just walk ourselves to the bar on the corner and, for the price of a beer, get the game too.
Between Netflix, Hulu, and HBO GO, there's plenty to watch at a fraction of the cost of cable, which comes with literally hundreds of channels you probably never watch. At least try it. These days it's easy to get cable back without fees since the cable companies are scrambling for customers.
5. Don't pay banking fees
Seriously, are you still paying a checking account maintenance fee or ATM fees for withdrawals from "foreign" machines? Stop it right now. The most recent survey shows that 72% of checking accounts charge a fee, so your job is to find the 28% and put your money there.* Likewise, there are enough credit cards out there that offer great rewards without charging an annual fee.
Sometimes all it takes is a mindset shift to find extra ways to save a few bucks. It might not seem like much to cancel the $10 per month music streaming service you rarely use, but when you adopt the perspective that it all adds up, it really does. Taking the bus instead of a cab when I have time to get somewhere or switching my standard Oregon pinot noir order to a much less expensive gin and tonic doesn't seem like a huge amount, but those 2 things add up to about $1,200 a year in savings for me. Remember, every dollar you save moves your retirement date a little closer.
* BankRate, Credit Union Checking Survey Results, March 13, 2017 http://www.bankrate.com/banking/checking/credit-union-checking-survey-results/
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