Great advice and plenty of additional aspects to consider. I'm a fan of the Millionaire Next Door and we conduct our lives in a fiscally sound fashion except for the megapad and vacation home and unfortunately these are big exceptions. The vacation home is actually close by and frequently used and is the most serene place, perfect for retirement. Brewer, I'm actually trying to find out just how we spend so much, going line by line thru the budget. Music lessons and instruments were about 5k alone. Groceries for a family of 4 is coming in at 19k. So we definitely have our work cut out for us. Ideally I would like to start the renovations on the vacation house before retiring and would like to enter retirement with newish cars as well. Thanks again for all the helpful advice.
We cut the grocery bill $10K a year - started buying more whole foods, paying attention to cost per calorie, shopping mostly at warehouse stores, stockpiling meat on sale with a chest freezer, not buying individual packets of anything, no more buying water bottles. I bought BPA free water bottles from Amazon and we fill those with tap water when we go out.
We cut our energy bill by $2.5K a year just switching over to LED bulbs, going around with a Kill a Watt, turning off lights, using drying racks, cooking with small appliances, opening windows in the morning to let cool air in in summer, etc.
With cutting our expenses we were FI, and with FI we could cut out life and disability insurance - $3K a year.
Dropped the landline - $600.
Downgraded cable package and renegotiated bill every year or so - $1.2K.
We actually bought newer, nicer cars but with lower maintenance costs and better MPG.
We go out to eat several times a week and take frequent day trips, we just found cheaper ways to do everything including library passes, coupons and annual memberships with reciprocal privileges.
We went through the budget line by line and cut tens of thousands we do not miss. Most posters here seem to be saving for ER but we realized in our fifties we just needed to cut expenses to be FI. I have a spreadsheet of a few hundred or so relatively painless ways to cut expenses I've collected from books and forums. Every month we go through the list and knock off a few of the highest ROI remaining items.
Last month we knocked another $1,141 off our annual expenses, so I figure that is $57,040 less in retirement funding needed over a potential 50 year retirement. If we had focused on saving more instead of spending less there is no way we could have saved an additional $57K in after tax money in one month even with both of us working full time, but the cost cutting items only took about 20 hours of work over the course of the month between us. Lower expenses require a lower drawdown in retirement, which for us means lower taxable income, which in turn lowers our state and federal taxes, increases ACA subsidies, and allows us to be eligible for tax credits and financial aid for college.
