Realistic Lifestyle Changes that Save Money

[00:00:00] Eric Brotman: This is Eric Brotman, the host of Don’t Retire… Graduate!: The podcast that teaches you how to advance into retirement rather than retreating. Welcome to Office Hours, where we answer listeners’ questions about personal finance, retirement readiness, and more. We received a question from Jonathan who asked what are some realistic lifestyle changes that save money.

And Jonathan, I think particularly with the fact that we’re so new into the year and people have made resolutions and a lot of them are financial resolutions, um, one of them is certainly to save more money and I have two ways to answer your question. One is how do you create the habit itself? And then the other is what are the lifestyle changes that, that allow that to happen.

Let’s start with the first question, which is how do you make this occur and how do you make sure that in fact you’re saving more money and the short answer is that you automate the process. That you do this through payroll deduction, or that you do it through automatic monthly deposits. That you have a regular ongoing contribution to your savings or debt reduction or investments or all of the above.

And, you know, in Don’t Retire… Graduate! the book and the courses, we talk about it as a pay yourself first. And the idea is that the first bill you pay every month is the one to yourself, so that you’re making sure that you hit those savings targets.

Now, in terms of lifestyle changes, everyone thinks the very same thing. It’s like, well, I should not buy four and $5 cups of coffee. And I, if I skipped one latte a day, it would, it would change my life. And the reality is for most people, skipping a latte every day is not the answer. It certainly would help. And you can, you’re free to make your own coffee, but at the end of the day, that’s not really the big lifestyle change uh, that’s going to wind up saving you additional money. So I think there’s a couple, I got a handful to share with you.

The first is that a lot of the things that we do in 2022 that are automated, we don’t even use. And so whether it’s streaming services or entertainment subscriptions, or these various things, lots of people have five and six and seven of them and really only need one or two. And so unlike saving a couple dollars a day on a cup of coffee, you might be in a position to reduce some of your monthly credit card charges or recurring charges by limiting how you digest that, that media, whether it’s entertainment or otherwise. So that’s one.

Another, which is I think pretty obvious, but in the age of COVID, it happened a little bit on, uh, by accident, which is to dine out a little bit less and to make some of your own meals. Um, groceries have gotten a lot more expensive. And so this isn’t a panacea, but if you’re a family of four dining out regularly becomes a very expensive proposition. And so while I hate to consider putting people on a budget per se, if you’re doing more of the cooking yourself, number one, you can have a lot of fun with it, but number two, you can save some money.

Another thing is to meal prep and, you know, nutritionists talk about meal prepping because it winds up being better for calorie counts and these kinds of things. And so I’m not suggesting that as a dietary mechanism though, it might become one. I suggest it because if you’re meal prepping, then you can buy the, the big family style, uh, you know, 12 pieces of chicken and you can make four meals out of it or three meals out of it in a week. And by doing that, and by having those meals already made, it takes some of the guesswork away. It means if you get home late from work one night, you’re not suddenly calling for delivery or, uh, or just going out for a bite because you, you don’t have time. It’s already made. And so meal prepping can save you some money.

Um, some bigger things. If you’re, if you’re in a position where you can have roommates, um, you know, particularly if you’re renting an apartment or if you’re buying your first home and you’re a young person, a lot of times, it’s great. If you buy your first home to get some help paying the mortgage by renting one or more bedrooms in your home. Um, not number one, you can give friends a place to live, uh, reasonably inexpensively and you could have some fun with it.

But number two, It can definitely offset your monthly nut. And that’s a good thing. Um, I’ve heard folks doing various car sharing and for people who live in urban settings, maybe not even having a car at all. By the time you have a car payment and the maintenance costs and the gasoline, which is now very expensive, uh, and, and all of the different plus the taxes and the registrations and all the various things. It sometimes is less expensive if you don’t need a car to get to work or school, it’s less expensive just not to have one. And I know the folks in Manhattan have been doing that for a long time, but, uh, for the rest of us, uh, as long as a car isn’t critical to do our day to day might be better not to have one.

So those are just a couple of lifestyle changes. There are certainly a dozen more and, uh, and downsizing a residence is one. Um, you know, picking a less expensive school could be one. Uh, going to, going to restaurants or entertainment venues that are less expensive could be one. They’re truly countless, but I think the key to it, Jonathan, is to make sure that you determine how much you need to save or invest to hit your goal, whether it’s a financial independence goal or a debt reduction goal or whatever it is.

Make sure that you’re doing that first and don’t let your lifestyle dictate how much money is left over at the end of the month. You decide how much to save and invest. You take control of it. You automate it to the best of your ability, and then only live on the rest, whether that’s 80% or 85 or 90 or whatever it is in your situation.

So I hope that helps. A great question. And Jonathan, thanks for. If you’d like to send us a question, which we might answer in a future episode of Office Hours, post it on our Facebook page or tweet us at @BrotmanPlanning. If you like, what you hear, please subscribe to our podcast and leave a review on apple podcasts or wherever you listen to your favorite shows.

Please also check out our books, workbooks and online financial literacy resources at brotmanmedia.com. Thanks for coming to office hours. Be sure to tune in for new content every Thursday. For now, this is your host, Eric Brotman, reminding you: don’t retire. Graduate!