One of the key ingredients to us becoming millionaires was to live below our means. For a long time into the 10-year-plan to become millionaires we believed we were living below our means. That was until I figured out we could save an additional $20,000 a year (that is not a misprint), getting us that much faster to becoming millionaires. here are the 10 ways to save money on your way to building wealth. It’s what we applied to ours and it worked.
1. Cut the cable cost No we did not the cable, just the cost. We simply looked at our bill, went to the cable company and saved over $700 a year on cable an internet. The best part, we have the same channels and twice the internet speed. More on this in Stick with cable and still save hundreds.
2. Cut the land-line notice how most of your calls left on your land-line are those of people trying to sell you something. We did and dropped the land-line. We combined both our cellphones under one family plan and now have all the voice, text and data we need and in the process saved over $200 on phone charges.
3. Spend less on groceries I actually did some research and found that the government keeps excellent statistics on how much families spend on their groceries. This research got us to look a little closer at our grocery list and we’ve now managed to save close to $200 a month (that is $2,400) on groceries. More on this in Gwyneth Paltrow and your groceries.
4. We dine out on strict budget before paying closer attention to our expenses we were spending around $360 per month on dining out (there were years where we spent closer to $450 on dining out). This is a huge expense that can easily be lowered. We’ve simply set out budget at $175 a month for dining out. Once that budget is up we eat in only. With this budget has come a savings of $2,220.
5. Switch to LED (or CF if you must) I know some people love their incandescent light bulbs, besides lighting the room it heats is at the same time. Us not so much, we’ve swapped out practically every light bulb with LED light. Yes the upfront cost is considerable but they last for over 20 years, so the cool thing is when you move you can take them all with you. By switching to LED exclusively, we’ve gone from paying $42 to $13 per month on lighting. Who would have thought light could save you save you close to $350 a year
6. Use less gas we’ve taken the drastic route of going all Hybrid with both out cars. By doing so we’ve saved close to $1000 per year on gas. You can read more on how the numbers break down in Should I still buy a Hybrid. In lieu of buying a hybrid did you know you can actually save on gas by doing little things like keeping your tires properly inflated?
7. Refinance The interest rates aren’t at the record lows they used to be but at this point they are still attractive. If you’re still locked into an interest rate over 5% and you intend to stay in your house for a considerable time longer. Refinancing might still be an option for you. We managed to refinance (this was before I quit my job) and cut out monthly mortgage cost from $1,788 to $1,562. That still reflects a saving of $2,712 a year. I have a feeling you might be able to do better.
we are fervent users of membership to almost all local attractions available. Memberships often pay for themselves after only the second visit. With them often also comes reciprocal access to attractions elsewhere. On top of that many of them are tax-deductible. We managed to save over $4000 a year by getting memberships. More on this in How we save over $4000 by buying memberships.
9. Clothing Surely I’ll be rubbing some people the wrong way but do you have spend what you spent on that purse… Clothing is an excellent category where you can save money. Instead of brand, buy generic (your true friends won’t love you any less). Instead of new, consider buying consignment, especially for your kids. Also don’t be ashamed to accept clothing from friends and family for your kids when theirs have outgrown them. We save close to $1000 annually by paying closer attention to the clothing we buy.
10. Your health anyone else notice how no matter what health insurance you have you still end up with that residual bill after each visit. It’s either co-pay, deductible or simply not covered. Dental insurance seems the worst here. Our dentist assistant called our dental insurance “nothing more than a coupon book”. Stay healthy and keep your teeth clean. You may be surprised how brushing twice daily and flossing can save you money in the long run.
Well there you have it. 10 savings that we applied to making it to become millionaires. Even if you have no plans of going to a million, surely some of these savings can be applied elsewhere whether it is for saving for a rainy day or paying off that crushing debt.
All these savings have been worked out in great detail in my book “How to make a million in 10 years, and how we did it in 13”. Check it out, it’s worth the read.
Good luck reaching your financial goals.