Becoming financially independent can be a slow process, taking many years to achieve.

Simply lowering your expenses, allowing you to save more money and increasing your savings rate, will help you retire even earlier.

If you reduce your expenses you can retire years earlier!

Let’s say you currently save $2,000 per month. You make a budget, and determine that you can cut out $1,000 in expenses per month.

If you compare saving $2,000/month vs. $3,000/month- you might be surprised that after 10 years, you will have almost $200,000 more.

This is assuming a conservative average yearly return of just 7%. The higher your return, the larger the difference will be after 10 years.

Initial Monthly Investment:$2000/Month Invested$3000/Month Invested
10 Year Total Contribution $237,120$355,680
Interest Earned (10 Years)$151,840$227,760
10 Year Total$388,960$583,440
Monthly Investment Comparison with 7% Yearly Return for a 10 Year Period (with 2% Increase in savings each year)
If you make small changes today, they will translate into LARGE changes in the future.

How can you reduce your expenses?

Here’s a list of expenses you can reduce or cut out entirely.

Spare no expense from your reduction!

Start cutting away at those expenses today!
  1. Rent/Mortgage
    • Get a roommate. You just reduced your rent by 50%. If you get two roommates, that’s a 67% reduction!
    • House hack- Get a mortgage on a house or duplex, and rent rooms to cover the mortgage bill.
  2. Car
    • Stick with used vehicles
    • Pay in cash
    • If you get a loan, pay it off entirely
    • If you live within walking or biking distance from work, consider not owning a vehicle
  3. Monthly Subscriptions
    • If you rarely use the subscription, cancel it
  4. Water Bill
    • If your water bill is high, look up ways to lower it.
    • Fix leaky faucets, lower consumption
  5. Gas bill
    • I use heated blankets in the winter to lower my heating costs
  6. Groceries
    • Plan your meals and only buy what you need
    • Use coupons and find deals
    • Buy nutritious foods- usually healthier foods are also more cost effective
  7. Car Insurance
    • Routinely check for lower rates
  8. Internet
    • Routinely check for lower rates
  9. Cell Phone
    • Find a Low Cost provider. I recommend Mint Mobile, $15/month for 3GB data.
    • Don’t buy the latest model every year.
  10. Find Frugal Tips

The $2,000 vs. $3,000 per month is a real example. This was my situation just a few years ago. I was able to cut out $1,000/month by being mindful.

My monthly savings is higher now, since I have a higher income and now have a partner.

Where can you cut out or lower expenses? How much more can you save?

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