Earning money is hard, but saving money is even harder. After working 40 plus hours each week, we feel that we just want to spend our paychecks and splurge like there is no tomorrow. We deserve it, but we know this only perpetuate a vicious cycle.
Working hard itself made me realize one thing. That we deserve more. Our freedom from being trapped in our jobs for the next 30 years. It is not that we want to quit our jobs right this minute. We deem ourselves privileged to have found a career that is very fulfilling. What we want is to get to a point when working becomes optional.
On our article, When Can I Retire?, we found that the one variable that can immensely accelerate our freedom is to increase our savings.
Easy choices, hard life. Hard choices easy life.Jerzy Gregorek of The Happy Body
This quote comes up every time I am faced with important decisions. The brain faced with various choices every day, from figuring out if it makes sense to hit the snooze button for the third time to considering the possibility of contributing to the company retirement plan, always takes the path of least resistance.
When humans still lived in the wild, decisions must be made quick because delays could be fatal. In order to survive in the present, the brain had adapted to go for the easy choice, but sometimes these decisions are not the best for us in the future.
Yes, Saving is a hard choice. Especially because the goal is so distant that there is a disconnect. The brain wants to enjoy a cookie right now, rather than have two cookies in the future.
But it does not have to be that hard. Every little decision counts! Here are some of the ways we found how to save money every year.
7. Switch to LED light bulbs
Why: Although it cost more, an LED bulb cost 17 cents less compared to 60-watt incandescent bulbs if you leave both turned on for the whole day. Also, it would not need to be replaced as much because LEDs also last 50 times longer than regular incandescent bulbs.
How: Check if there are still the old incandescent bulbs in the house. Replace them and enjoy the savings from not paying too much on your energy bill and not replacing light bulbs as often.
Annual Savings: $301.12 *comparison made on 33 light bulbs running 5 hours each day
6. Shop Car Insurance every 6 months
Why: When car insurance companies see that you are unlikely to change your policy and would just keep on renewing each year, they would often practice price optimization resulting to increased premiums at your expense.
Shopping around could often get you the same or better coverage for less premium. It is strange how new customers are being rewarded more than loyal customers, but that is how they play.
How: Remind yourself at the end of your current policy to shop for car insurance. Update all your information. This is very important because it could affect your premiums. For example, if you paid off your car, you could downgrade some required coverage to save more and if your credit score got better your premiums may also go down.
Once you found a better option for the coverage you want, give your current provider a call to see if they could match it. If they can, then renew, but if not, cancel the policy and get the new one. You will always get better rates if you pay for 6 months at a time than monthly. Then, set a reminder to shop again after 6 months.
Annual Savings: $420
5. Filter your Own Water
Why: This is one of the easiest ways how to save money. Bottled water is expensive not because of the water itself. The price difference is due to the cost of manufacturing, transporting, and advertising to get you the bottle. You don’t incur these costs when you filter your tap water.
How: Install a water filter on the kitchen faucet or get those pitchers with filters in them. Replace as directed.
Annual Savings: $ 649.46 *based on consumption of 365 gallons each year
4. Eat Plant-Based
Why: Almost 20% of our budget is spent on food. It is challenging to find ways to save in this line item without sacrificing nutrition and taste. Although it is not the only reason, the higher cost of meat compared to vegetables and grains is one of the considerations that made us try a plant-based diet.
How: Start by slowly replacing a meal or two with plant-based meals. For breakfast, you could have instant oats with fruits, nuts and seeds and a cup of coffee. Lunch and Dinner for us is mostly rice with vegetables and beans in different kinds of sauces.
It would be a struggle for the first few days because of the cravings, but as you continue with the diet your taste buds change and start to love your plant-based meals. Now is a good time to try this because a lot of people are in it now and they have explored a lot of options for us to try. Just search a meal you want and add “plant-based or vegan”. I am sure there will be pages of recipes you can try!
Annual Savings: $2600
3. Plan your Meals
Why: Most of the time we are just too lazy to prepare our meals when there is nothing to eat when we get home from work. It seems so easy just to go for a drive at a restaurant, pick-up something to go or have our dinner delivered.
Most businesses charge about 300% mark up on the meals that they serve, not including gas and the time you spent to get there. There are also surprised fees and order minimums on food to-go and delivery, so this option does not offer much on saving on food expenses as well.
How: Write down every meal you want to eat for a whole week. Prepare and store them in big batches. When it is time to eat, you take away the stress of deciding what to eat and where to get it. Just heat and serve.
We cook about 3 dishes and store them in the fridge. If we run out, I have frozen vegetables and sauces in the freezer for minute meals. Our slow cooker is one of our best purchases, because it can do the cooking while we are at work or sleeping.
Annual Savings: $6240 *comparison made on weekday dinners
2. Travel to Low Cost of Living Places
Why: We love to travel, but it can be expensive to do so. If we are not careful it could wreak havoc on our savings goals. Fortunately, there are a lot of beautiful places to travel that will not break the bank.
On top of the airline costs, it could be very expensive to stay in touristy cities. When visiting other countries, we want to be immersed in the experience and be there for weeks at a time and so we had to be creative in finding ways how to save money.
How: Research low cost of living areas in the region where you want to travel. It usually helps to search “cheap places to retire” as it will pull-up safer areas as well. If you want to go to a city that is expensive, look for towns nearby that offers lower rates. See if it makes sense to take public transportation. After you have all the information, build your budget, and save for your vacation fund.
Annual Savings: $6000 *4 weeks of travel, twice a year
Check out how we planned our vacations on the links below!
1. Rent your Rooms
Why: Your house has a lot of potential. We spend about 30 – 50 % of our income on housing expenses (rent or mortgage). Finding ways to bring it down can easily accelerate our savings. There are always people looking for short or long term stay that you can accommodate.
How: Do you have a spare bedroom just collecting dust and cobwebs waiting for the “someday” guests? Turn it to an income producing asset that could possibly cover all your home expenses.
Browse room for rent websites (Roomies, Hotpads, Facebook Marketplace) to find how much a room rents in your area. Does it make sense? Fix up the space and list it.
Annual Savings: $18,900
Watch the video below for an in-depth tutorial on how we House Hacked!
There are a lot of ways on how to save money just hiding in your monthly bills. Take time to examine it. Look at each line item. Ask if you still need it, if it gives you value or if you could have it for less.
Take over your finances. Implement small changes. Make the hard decisions now so you can live an intentional life moving forward.
Let us know how you found ways to save money in your comments below or visit our Facebook page!