Save More Money by Cutting Down on Housing and Transportation Costs
We all would probably like to have a little more money in the bank. One easy way to do this is to underestimate housing and transportation costs.
Business Insider recently spoke with Tanya Hester , author of Employment by Choice: Retire Early on a Penny . In the book, Hester makes a number of suggestions on how you can save more money without feeling like you are saving money. One of the easiest, in her opinion, is to reduce the cost of housing and transport.
For example, while you may be more comfortable in a two-bedroom apartment, choosing to live in a one-bedroom apartment can save hundreds of dollars in housing costs. Hester, who retired at 38, lived in an older one-bedroom apartment, although she could afford to move to a much larger and more beautiful location.
Housing costs can also be reduced, such as finding a roommate or renting a house (or room) on Airbnb on weekends.
For example, saving just $ 400 a month would bring in $ 4,800 a year. Do this for ten years and you will have nearly $ 50,000 in the bank, and more if you save it in a high-interest savings account. The more you save each month, the faster things will build up. I would venture to say that in most cities the difference between one and two bedrooms is well over $ 400. If you are buying a home, buying a $ 300,000 home, even if you can afford a $ 600,000 mortgage, can make a big difference to your savings.
Housing is where we all spend most of our money. The more ways you can reduce these costs, the more you will save. Even more than cutting corners in other areas of your life.
Transportation costs were another big concern for Hester. Owning a car and paying for insurance, maintenance and related costs can get expensive pretty quickly.
Hester recommends living in a location where you can walk to most places, thus eliminating the need for a car. If you really need a car, consider buying a used car and keeping it for a long time rather than swapping it out for a new model after a few years.
When I moved to San Francisco, I left my car to save money. Besides paying for the car and gas, I also had to pay for parking. After putting it all together, I would spend about $ 600-700 a month buying a car. I walk and travel a lot by train, but even if I went everywhere in Lyft, I would be spending less of that money every month.
Clearly your (literal) mileage will be different, but look for ways to cut costs when it comes to getting around. Sharing cars, if you need that car, or traveling by bus or train, can lead to significant savings over time.
And when you do save that money, immediately hide it from you in a high-interest savings account or 401 (k) account so you won’t even notice that it is gone. When you do this, you can slowly but surely accumulate a nest egg, which will be there when you need it.
Business Insider | The woman who retired early at 38 says 4 strategies can help anyone save pennies