Saving for early retirement takes both earning extra money and cutting expenses. Many people dread the cutting part, but it doesn’t usually hurt your health or happiness.
When I say “just in time for the holidays,” I’m not suggesting you spend these savings on a pile of gifts. That money is better used to pay down debt. Still, it’s okay to treat yourself now and then—a latte or a new pair of shoes from a reseller is fine.
Without further ado, here are some practical hacks:
1) Stop buying clothes at J.Crew. Try eBay and consignment shops instead. Last month I found two like-new Banana Republic wool sweaters on eBay for $15 each—far better than the $80+ outlet price. Check out Poshmark too; I’ve bought brand-new and nearly new items there with no problems. They carry high-end and everyday brands, and returns are easy if something isn’t as expected. Estimated savings: $125–$200/month for a family of four.
2) Ditch expensive name-brand cell plans. Most people only need a small amount of data thanks to widespread WiFi—often around 1GB a month. Also check if your employer offers a carrier discount (I only just found out we get 23% off Verizon). We now pay $40/month using Ting/Mint Mobile. Estimated savings: $75–$125/month.
3) Re-shop your auto and home insurance. Geico is a solid starting point, but an insurance broker can often find cheaper multi-policy deals. Aim for deductibles around $1,000 for auto and $2,500 for home so you only file claims for major losses. Estimated savings: $150–$300/month (for two cars and one home).
4) Cut hair at home. My wife does a great job with a cordless Wahl; she trims my son’s hair and I still think he looks great. My daughter grows her hair long, so my wife trims a bit every few months. It’s simple and effective. Estimated savings: $50–$80/month.
5) Drop Comcast and DirecTV. Most people don’t regret watching less TV. An HD antenna gives you about 30 free channels, and you might find that reading or hobbies fill the time better. Estimated savings: $50–$140/month, depending on your package.
6) Bonus: Go vegetarian, even part-time. Skipping meat a few days a week cuts costs—beans and tofu are cheap and easy to cook. It’s also healthier for you and the planet. Estimated savings: $200–$400/month, depending on how much meat your family usually eats.
On the low end, these changes can save about $650/month or $7,800/year. On the high end, you could save up to $1,250/month ($15,000/year). That could pay for a trip to Cancun or a luxury getaway to Grand Cayman—but you’d probably be smarter to use the money to pay off student loans, credit card debt, or your mortgage so you can leave the rat race sooner.
There are plenty more ways to trim your budget, but this is a good place to start. Challenge yourself and see what you can cut before the holiday feast.
Happy Thanksgiving!