There are plenty of people out there who feel like they need to “Keep up with the Joneses” and buy a brand new phone every single year. Depending on the brand, this can cost between $500 to $1,000 for the phone, as well as taxes, accessories, and a potentially a new phone service plan.
Before you buy a new phone, ask yourself if you really need it. Can you keep using your current phone for another year or two? Also consider buying a second-hand phone if you really need an upgrade for work obligations.
There are some people who insist on having the newest Macbook every single year who will go to great lengths to stand in line outside of the Apple Store. They are always around $1,300 each when they are brand new. These computers are expensive because they are high quality and built to last. So it doesn’t make sense to be upgrading your computer every single year.
During your one-to-two year savings journey, keep the same computer that you already have. Only upgrade if it is completely necessary for your work. For example, if your computer’s operating system no longer allows Google Chrome to work, that’s a huge problem! You can also save money by buying a second-hand computer, instead of purchasing a brand new one.
In the United States, there is a huge emphasis on the car we drive. It becomes a status symbol, and it tells people a lot about who you are as a person. Remember that these are all just social constructs. Warren Buffet is a billionaire, and yet he will buy the same car and keep it for over 10 years.
If you have more than one vehicle in your household, ask your spouse if it’s possible to share just one. You could sell your car and make a few thousand dollars back if you own it out-right, and it could also save on monthly car insurance and gas. If you live in a city, you probably have the option to take public transportation or walk to work, too. The amount of money could can save would vary from person to person. But if your monthly car expenses add up to $400, that’s $4,800 per year.
Most Americans have more clothes than they actually need. And a lot of people have outfits in their closet that are still new-with-tags. There is a very good chance that if you stopped buying clothes completely for the next year, you could still be fine, and totally presentable in your every-day-life.
Remember that clothes don’t have to be such a big deal. There is a reason why some people subscribe to the idea of a “capsule wardrobe”. The amount of money you could save on clothes over time would vary drastically from person to person, but for some, it could easily add up to over $1,000 a year.
If you are going on a journey to save money, let your partner know immediately. After all, if they are one of the most important people in your life, they should know about your hopes and dreams. If you agree to make this journey together, it can be a lot easier to achieve your goal.
If you and your partner both agree to go on cheap dates, cook at home, and spend less money in general, it can become a lot easier to be held accountable. And if you are married, you could both contribute money into the same savings account, and the $25,000 will grow even faster.
Just because you are trying to save money doesn’t mean you have to give up going out and having fun. Nearly every Parks and Recreation department tries to have free community events planned for its residents, especially in the spring and summer. These could be craft shows, outdoor concerts, workshops, car shows, and so much more. There may also be a local coffee shop that hosts an open mic night.
Once you start going to a lot of these free events, you may start running into the same people who are doing what you are doing. This is great, because it means that you can surround yourself with a “tribe” of new friends who are like-minded people. Even after your year or two of saving is over, you may find yourself continuing to go to these events, simply because it’s a lot of fun.
Everyone has to pay your bills, no matter where you live. But there are almost always ways to cut down on your monthly bills. Call your electricity, phone, internet, and gas companies to ask if they are willing to give any kind of discount for being a loyal customer. You may have to ask if there is a “customer retention department”.
If your utility companies are not willing to budge, you may want to consider switching to another company Sometimes, there will be sign-up bonuses that will give you a great deal for one year when you first sign up. Look for offers, and make a switch, if only temporarily.
If you have a steady full-time job, you may put some money aside from each paycheck to go towards your vacation. If you are trying to reach your goal of getting to $25,000, you may want to consider putting off a vacation for at least a year or two, until you reach your goal.
Considering that most vacations cost anywhere from $1,000 to $5,000, this is a huge chunk of money that could put you one step closer to your goal. Instead of flying to an exotic location, consider giving yourself a “stay-cation”. Relax at home, read a good book, and get things done.
If your living expenses are really high, and it’s not possible to break your lease any time soon, you should consider getting a roommate or two. By splitting the cost of your rent in half, you can immediately begin putting that extra money towards your goal of saving.
If you rent was $1,500 alone, it can go down to $750. After one year, that adds up to $9,000. That’s a huge chunk of money towards your $25,000 goal!
Do you have a two-bedroom apartment, but you’re just one person? You could be bringing in some extra income by renting out a room on AirBnB. If you live in an urban area, you will be almost guaranteed to be fully booked at all times, as long as you are offering a reasonable rate.
Every location is different, and the amount of money you can get for your space may vary drastically. However, let’s assume you can make $100 per night from renting out a room. Multiple that $100 by 10 nights per month, and that’s $1,000, or $12,000 per year towards your goal.
A lot of people refuse to give up their habit of going to Starbucks for a $4 coffee every single day. They make the excuse that it gives them a place to study outside of the house, or that it’s the only coffee that helps keep them awake. Sorry to say, but most of those reason are just excuses. If you went to Starbucks and spent $4 per day 365 days a year, that’s $1,460…And most people spend more than $4 per trip.
That is a significant chunk of money that could be going towards your $25,000 goal! Instead of going to Starbucks, get the K-Cups or a bag of coffee grounds, and start making the exact same coffee at home. You can give yourself an equally relaxing atmosphere with good music, a coffee bar, and everything else, too.
Almost everyone has a monthly subscription that they put on a credit card and completely forget about. It could be a video streaming service like Netflix or Hulu. Maybe it’s your gym membership, or a fee to join an online course. Even if it is only $10 a month, that adds up to $120 per year. Considering that you may have multiple subscriptions, this could be several hundred dollars you are wasting.
Instead of thinking in terms that maybe some day you’ll use it, cancel, and wait until you are actually ready to start again. For example, maybe there is a blizzard that is forcing you to stay home from work for a few days, and you would love to get that Netflix subscription back. Get it back for one month, and then cancel it.
3. Remind Yourself Of How Much Your Investments Will Be Worth
Once you get in the habit of investing wisely, you will realize that every dollar counts. Suddenly, “It’s just $5” turns into- “But that $5 could become $10.” There are a lot of different ways to invest, and there is no one-size-fits-all answer on how to do it. You may want to invest in the stock market, or start a business.
If you are trying to save for retirement, it becomes more important than ever to start investing. When you invest in a ROTH IRA, your retirement savings will grow to the point where if you start saving in your 20’s, you can become a millionaire by the time you retire.
If your job is not paying you enough to save money and achieve your goals, it may be time for you to update your resume and switch careers. Yes, this is easier said than done, and sometimes, it might feel like you are lucky to be employed at all. If you really want to make a big change in your career, it may require you to take a class, move to a different town, or say goodbye to co-workers who have become friends.
Remember that at the end of the day, you are the only person responsible for your success and well-being. And sometimes, you have to make the choices that are going to be the best for you, and your future. Always be looking out for your own best interests, and consider all options.
Remember that the journey to saving $25,000 will be a long road. It will not always be easy. In fact, it is more likely that you will have a lot of issues along the way. Just remind yourself how important it is to get to the goal you desire. Whether it’s a new house, a debt-free life, or anything else, you will feel proud of yourself in the end.
Also remind yourself that this is frugal lifestyle to save your $25,000 is only temporary. Once you are done with your timeline, you can go back to living however you want. The more strict you are with your saving habits, the easier your future will become. You can do this! Don’t give up.