How I save thousands of dollars per year by simply cutting expenses. (Part 1)

Hello everyone,

I want to start this post by stating that I have no formal education on budgeting or financial advisement. This is just some basic information that I would like to share on how I personally save thousands of dollars per year by simply cutting back on spending and living below my means. This is mostly geared toward younger adults who may not have thought about budgeting early on. Hopefully you find one helpful idea in this post. 

1. Cut down monthly bills

Most of your hard-earned money probably goes towards monthly bills. Rent, Utilities, Phone, Internet, Car insurance, Gym membership etc. I also include my grocery budget in my monthly bills, as it's something we need to survive..even more so than the other things. Many of these expenses are easily decreased.

• Phone: A lot of people pay more for their phone bill than they really need to. If you are paying for long distance calling or big data plans that you don't really use...you are throwing away money for nothing. Some people need expensive phone plans, but I'd be willing to bet most of us can cut it down. I went from a $75 phone plan down to a $45 plan. And while that's only $30 a month...that's a savings of $360 per year.

• Internet: I believe many of us overestimate the speed of internet we really need. Unless a significant part of your income comes from the computer and requires you to have lightning speed service, 15 MBPS should be enough. That is enough to stream HD videos. If you need an extra boost, I recommend using an ethernet cable to make a solid connection, rather than using WiFi. I save $440 per year by splitting the internet with my neighboring apartment tenant. 

• Car insurance: This one is simple. I suggest taking an hour and calling up a few insurance companies. I did this and fortunately, I was already getting the best rate I could find. If you can get a rate that is even 20$ lower a month...that could be $240 per year. Many years later you'll be glad you spent that hour and saved literally thousands of dollars. 

• Gym membership: As someone who is into fitness, I have already spent thousands of dollars on gym memberships over the years, and I'm only 25 years old. After realizing how much I was really spending I decided to cancel my membership at my favourite gym (LA Fitness). I was spending $40/month there plus the activation fee.  Now I pay $10/month at a cheaper gym. I'm saving $360 per year.

• Rent: When shopping for a new apartment. I like to think of the cost on a yearly basis rather than a monthly basis. If one apartment is $1,200 and another is $1,400...that $200 may not seem like a lot. But think of it as $2400 in a year, and now you have a significant number to think about. Is that more expensive apartment really worth it? Maybe it is. But hey, all I am saying is think about it on a yearly term. It could save you $1200-3600 per year.

• Food: If you are a person who eats out a lot, I'd suggest figuring out how much you actually spend each year. When I first started in the workforce I would go out for lunch every day, usually spending $15. 15 x 5 days x 46 weeks (assuming I take 2 weeks off) = $3,450 ON LUNCH! I now cook leftovers every night so I have enough for lunch the next day. I save myself about $10 a day on lunch just by bringing my own. That is $2,300 per year.

Overall, cutting down on these monthly expenses have saved me about $4500 per year. I'll make some other posts about what I'm doing with those savings to help me on my goal of early retirement.

I hope this post helps even 1 person. If it does, it was worth the time writing it.

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