Save Over $5,000 Per Year Easily

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Save Over $5,000 Per Year Easily simple money man

 

We’ve all heard it: there are little things you can do to easily save money. I’m here to say that it’s true and it works. And if you do these easy little things on a consistent basis; thus establishing them as good habits, then you can save a lot of money.

 

Right off the bat, here are some quick and easy ways to save.

 

 

Item  Cost Occurrence  Annualized
Coffee – weekdays $2.00 260 $520.00
Lunch – weekdays $7.00 260 $1,820.00
Gym – monthly $30.00 12 $360.00
Cable – monthly $100.00 12 $1,200.00
Alcohol – weekly $30.00 52 $1,560.00
Total $5,460.00

 

The occurrence column below which has 260 is simply 52 weeks to a year times 5 days a week. All the other occurrences are basically self-explanatory.

 

Don’t feel overwhelmed. If you’re doing two of them, maybe you can start working on three more. If you’re already doing all five of them, maybe you can think of more ways. If you’re not doing any of them and think that it can be overwhelming to implement, start off slowly and build on the momentum.

 

For example, buy coffee on Tuesdays and Thursdays instead of all five days. And go out for lunch on Monday, Wednesday, and Fridays and bring lunch from home the other days.

 

 

Savings Solution Breakdown

 

Coffee Solution – invest in a Keurig machine. At home, I’m the only one that drinks coffee. So I make a cup every day. I usually buy the k-cup breakfast blend because I don’t like my coffee really strong. On average, each k-cup cost less than 35 cents, so annualized; I’m saving over $400. You can pick the size of the cup you want and even the machine pays for itself in less than a year since it costs about $120.

 

Lunch Solution – packing your own lunch – usually leftovers or a sandwich. We always have leftovers or about 95% of the time. A sandwich is a back-up. So it probably costs me around 60 cents to make a peanut butter sandwich accounting for bread and peanut butter.

 

Leftovers of chicken and some vegetable is around $2. If I take leftovers 2-3 days and a sandwich for 1-2 days for lunch, that would amount to about $780 annualized. And to be conservative, I’ll add $100 just in case I feel like eating out once in a while or am just too lazy to make anything. I’d still be saving $940 per year by packing lunch overall.

 

Gym Solution – let’s say you don’t have a gym at work. You can buy a total body gym from Walmart for $260. And you can supplement with bodyweight exercises like pull-ups and push-ups, squats, etc. You can do cardio by running outdoors too and breathe in fresh air for free. In the end, you’d save about $100 in year 1 and $360 every year thereafter.

 

Finally, you can do cardio and other exercises using YouTube videos in your living room. Here is a 45-minute workout that requires no equipment. It was uploaded a couple of months ago and already has almost 20,000 views:

 

Cable Solution – cut cable. If you get a service like Netflix, you only have to pay $10.99 per month to get it streaming on two devices. I’m not promoting Netflix; just stating the facts. Netflix has more than 50 million subscribers in the US.

 

Other streaming companies like Amazon Prime and Hulu are continuously adding more subscribers too as people are switching over from cable. At least for Netflix, I know that you’re able to save content on your device and watch it later in places where you don’t have an internet connection.

 

Hulu is another streaming service which has over 3,000 TV series and comes at a starting price of only $7.99 per month.

 

Alcohol Solution – if you like to have a drink every now and then, consider buying in bulk. Consider having some drinks with friends at home before you go out and maybe order only 1 or 2 drinks at a bar or restaurant. Or even better, quit altogether. There are many programs out there to help and your liver will thank you.

 

 

And Then Invest the $5,000

 

Since we have a plan to save the $5,000, what will happen if we invest it? Well, let’s say after a couple of years you accumulate $10,000 or more and put it into the Vanguard Total Stock Market Index Fund (VTSAX). Assuming you continue to put $5,000 each year thereafter, in 10 years your investment and additional contributions can grow to over $70,000 assuming it earns 8.65% as it has in the past 10 years in this fund.

 

Please note that I’m not an investment professional and am not advising you to invest in this fund. I encourage you to please do your own research and due diligence before making any investment decisions.  This is simply one example of many index funds or ETFs to choose from. But doesn’t it make you want to start saving than investing?

 

Simply stated, all I’m saying is to invest the money you save so that it can grow more than it would if it were just sitting in a savings account. Saving is step 1 as outlined by the 5 easy ways to save above. And investing is step 2 with the Vanguard example.

 

 

Is there anything you’re spending on that you can’t wait to stop? Is a contract holding you back? Are you tricking yourself to somehow justify the expense(s)?

 

 

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I use Personal Capital because (1) it’s free, (2) it tracks all of my accounts and overall net worth, (3) my account balances automatically update, (4) it shows how my investments are diversified and allocated in various sectors, and (5) can use built-in tools like “Investment Checkup” to get….wait for it…free personalized advice!

 

9 thoughts on “Save Over $5,000 Per Year Easily

  1. Hey SMM!

    Great guide. For coffee, I go a little extreme and take a caffeine pill with my breakfast each day (coffee on an empty-ish stomach doesn’t sit well with me). And I’m a huge fan of working out at home.

    Like you say, the little things matter!

    1. I’ve never tried this pill, but I’m glad you do. I try to limit my coffee intake to about 1 1/2 cups per day. We have a coffee club at work which is a great perk. And there are endless exercises to do at home by incorporating our own body weight 🙂

  2. Hi SMM, I can attest to this. All of those methods work and I have done them all except cutting cable. I don’t feel deprived. I drink plenty of coffee from my pot, alcohol from my personal stock and good food from the fridge. I exercise at home or outside. What you say works and is of little sacrifice. I started changing these habits around the age of 30 when I realized I didn’t have another 35 years of Corporate American in me. Nice post. Tom
    Tom at Dividends Diversify recently posted…Work, Save, Invest, Build Wealth, but Never RetireMy Profile

    1. Thank you. It took me a while to cut the cord and decide on an alternative. Currently, I have Sling TV but saw ads yesterday regarding YouTube TV. That could be an option as well; ah the beauty of not being bound to a contract 🙂

  3. It is amazing how much you can save by cutting down on small purchases alone. A coffee a day over the course of the year alone can equate to over 1k. If you are buying the expensive stuff that is on your way to work.

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