Wednesday, June 27, 2012

How I saved Myself over $500,000!

My handy and faithful mower
Yep, you heard me right, I just saved myself $500,000 and it involved very few life changes.  So, am I going out to buy a brand new boat or new car...well not really.  You see, I don't exactly have that money right now, but it is something I will have.  Let me explain further.

I hate spending money in most situations, but I do not consider myself cheap.  When guests arrive or company visits, I often treat them and have a grand old time.  However, I have found places in my life where spending more money is just not necessary.  Here's a list of all the places I've saved a boat load of cash.

1.) Having 1 car ($1,900/year)- when you think about the wear and tear, gas, insurance, and other costs, having another car can really start to add up.

2.) Basic Internet and no cable ($720/year) - I think too much TV is bad for the brain plus I just don't want to pay for it.  Having just basic Internet provides hours of entertainment.

3.) 2 Basic feature phones ($1,440/year) -  Smart phones are wonderful technology, but when I recently went over to my friendly Verizon store and asked how much it would cost, I was stunned to find out that the bill would be close to $100/person/month.  No way!

4.) Salvation Arm ($120/year) - I don't do a bunch of shopping at the Army, but I do get about 4 dress shirts and a pair of pants from them every year.

5.) Manual lawn mower ($28/year) - I have both a manual lawn mower and a gas powered push mower, however I only use the gas one once every 3-4 weeks.  In between, I use the manual mower which is quite, fun, and saves on gas and wear and tear to my other mower.

6.) Paying off debt ($1,040/year) - My wife and I have taken a pretty aggressive stance on paying off our debt from student loans and our mortgage.  We save about $1,040/year (probably for the next 5 years) in interest.

7.) Buying generic store brand groceries ($1,040/year) - We have a really great store in our area where the generics taste just like the name brands.  I estimate we save about $20 per shopping trip just by switching to them.

8.) Bringing my lunch to work ($520/year) - I figure it costs me about $2/day more to buy my lunch then to bring in some leftover dinner.

In total, this brings me to $6,788 per year in savings...but I said I saved $500,000.  Well, this is where you have to start thinking in terms of retirement.  I mentioned it in this article, but if you take $6,788 (less than this after 5 years when my debts are paid off) per year and apply an inflation adjusted 4% return each year, you will end up with $566,000 in retirement income.  Not too bad for just applying some good frugal habits to my life.  You can do this too; just find some areas where you are spending your cash everyday, and see if there are ways you can spend less.  Besides, who doesn't like half a million dollars.

Wonderful Moment of the Day: Realizing I only have 1 egg in the fridge and invent a new food for myself called the egg omelet wrap.

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