Once you make the decision to save more and spend less, it becomes kind of like a game (for me at least!) on how to reduce expenses further, especially the big ones. When beginning your FIRE journey (Financial Independence, Retire Early), you will want to look at your 3 biggest expenses and typically they are Housing, Transportation and Food.
Here are the ways we saved the most money quickly:
1. Zero Debt
When we found out we were expecting a new little person to join our family, we panicked about how cold the room was in the winter with it's old baseboard heating. We thought we should renovate to get in-floor heating and decorate it nicely while we were at it. That led to a loan against our car at about 4.2% interest. Payments were $650/month, so we worked really hard to pay that off quickly and eliminated that debt. It was SO nice to have that payment gone and redirect that $650/month to savings.
2. Reduced Food Costs
Covid definitely helped in this department, as did just being new parents. Our social life became less lively during the evenings and we found how much we actually enjoyed cooking together. Eating at home also made it FEEL like we had more time than when we would go out. Less time spent getting to the restaurant, waiting for service, etc. We have to do dishes and plan for the meal, but it all seems well worth it. Plus the more we cooked the same recipes, the more efficient we became as cooks.
3. Eliminated a Car
For a while, my husband and I needed 2 cars because neither of our offices were accessible by transit without adding an hour to our commute (each way) and we worked on opposite sides of the greater Vancouver area. Then 2 years ago I took a job that allowed us to carpool and that is when we started thinking we could do without one car. We first did a trial run of living without one car, by un-insuring it and leaving it parked in our underground for 8 months.
We walk everywhere, and now with Covid allowing us to work from home, we really don’t need the second car. We are in the process of selling it as I write this - woohoo!
4. Renegotiated Bills
As any diligent FIRE seeker would do, I examined ALL of our regular expenses and looked at how we could potentially save some money. In the span of 6 months, we were able to lower our internet, cell phone, hydro and gas expenses significantly lower than previously.
In Canada, we have 3 primary internet providers: Shaw, Bell and Telus. They constantly try to entice the others' clients, so when one contract is up, it's not unusual for people to find savings opportunities by switching. We seemed to have got an extra deal because it was a Black Friday deal.
Since Covid, we are on WIFI a lot more than before. I looked at how many GB's / month I was using and it was far more than my plan included. By checking into current rates for a lower data plan, I was able to save $25/month. And the kicker is, a month later my provider (Fido) all of a sudden gave me a bonus 10 GB's a month for FREE! I was on a 4 GB plan....steal of a deal!
Working from home hasn't seemed to increase our hydro bill too much, however we are able to reduce it overall due to an allowance my husband's company pays out monthly to cover that expense. Further working from home has significantly reduced our gas bill from commuting.
What significant changes or hacks have you discovered that allowed you to put away some more moolah? Please comment below or shoot me an email - I love to learn new tricks!
If you like what you read here, I invite you to subscribe to this blog below -- you will only receive an alert when I write a post, which isn't more than once per week. Or if Instagram is your thing, you can find me there too. :)