An important part of the journey to financial independence is saving as much as possible without compromising your happiness in life. Saving works in both ways. First, your annual expenses will be lower, so you will ultimately need less capital to live on after you stop working. Secondly, by saving you will have more money, so you can invest more and thus grow your capital.
Especially the first time you go through your finances in search of savings is fun. The most profit can be made here. Haven’t you done this yet? What are you waiting for! Login to your bankaccount and go through all your expenses from the past year. To begin with, I wouldn’t look at the groceries … we’ll pick this up later. Write down each expense and try to group it together as much as possible. Then consider per expenditure whether this can be lower, can be canceled or whether this cannot and remains as it is. We are looking for the recurring costs. Below I give some examples of categories and things that can be saved.
This is quickly the largest expense for most households. Saving on this can be taken to the extreme by, for example, selling your house and living / renting smaller. To keep it simple in the first instance, you can look at the following costs:
- Mortgage: Do you still have a high interest rate on your mortgage, can it be lower? In many cases this is possible, ask your mortgage lender. Nothing ventured, nothing gained!
- Cleaning and maintenance (house / garden): Do you have a cleaner, gardener, handyman or window cleaner? Think about whether you want to do or can do this yourself and invest the money that you have left.
- Energy: In addition to using energy more consciously, it pays to look carefully every year to see which energy supplier has the best offer and to switch. Often there is also a welcome bonus that makes switching even more interesting. An example is a cashback after the first year. Changing is easier than you might think, and you don’t have to worry about running out of power.
For almost all types of insurance, such as your car insurance, health insurance, life insurance, liability insurance, etc … this can often be done cheaper. Especially if you have not looked at this for a while. For example, we have adjusted our car insurance and now pay +/- 55, – per month instead of 75, -.
How much money do you spend on transportation? Can this be done cheaper? Try to be creative, maybe you can go cycling, the second car can go, you can look for work closer, you can drive along, drive a smaller car, etc … As an example we have a much too large lease car and a second small own car. The large car in particular now feels like a burden, with a smaller car we would be no less happy. The only tricky thing is that we can’t just get rid of it because of the contract … but sit out and make better choices next time.
Household expenses Stopping or reducing this is a quick saving that can add up considerably. I have read, for example, that ordering Pizzas is for millionaires … sounds a bit exaggerated, but throwing a pizza in the oven yourself is quickly a third of the price and all small amounts quickly add up to a larger amount, especially when you buy this on an annual basis.
Mobile, Internet, TV and Streaming services
You can save on your mobile, internet and television by properly comparing the different providers. You can of course also ask yourself whether you need these things at all. For example, we have changed to the lowest speed internet subscription, we have canceled television and we plan to switch to a cheaper provider later this year (when the contract period is over). With regard to services such as Netflix, Amazon, Disney +, etc .. you may be able to share the subscription (if that is allowed) or temporarily stop your subscription if you have just seen the series or films you wanted to see. You can easily reactivate them when there is new content.
This is of course very personal, but you may be able to reconsider and stop the charities you donate to for your new goal of becoming financially independent or being able to retire early. We have chosen to stop most of the goals and to consider voluntary work we can retire early.
This one is simple, stop and invest. If I had invested all the money I had spent on lotteries in the past, I was already well on the way to good fortune .. so learn from my mistakes and spend this money a lot better.
If you have small children and not the luck of a grandfather and grandmother who can babysit, you will recognize the high childcare costs. For us even cost item number two, which in itself makes sense with four children. Here too it is good to look for savings. For example, is it possible to work 4 x 9 hours instead of 5 x 8? Can you move your part-time day to Wednesday, so that you need fewer care hours? Can you switch from a Crèche to a Childminder? Can you agree with friends / family that you will take care of their children on your part-time day and vice versa yours? Ask grandpa and grandma to babysit the kids for a day.
Based on these tips you should be able to make nice steps in terms of savings. Did I miss any categories? do you have any tips or ideas you want to share? Did this article help you? Let me know by leaving a comment.