Spending Diet update! You can track how my own savings are progressing here.
The most frustrating thing about trying to save massive amounts of money is the unavoidable fact that you have to spend money to live. It would be so much easier to sock away money from my not-terrible job if I didn’t have to pay for costly but necessary parts of life.
Here’s a list of some of the top money sucks for Twenty-Somethings, and a few tips on how to reduce them:
For most people this is their biggest living expense. Rent can cost you between 30%-60% of your income, particularly if you live in an expensive area.
There is one really great solution to this- IF you can stomach it. Moving back in with my mom has saved me boatloads of money. It’s not as fun as living independently, but all of that money I would have spent on rent (probably about $1000 a month in this area) now goes directly into savings. Of course this requires willing parents and logistics, but it’s worth giving some serious thought.
If that’s not an option for you, you might consider moving to a cheaper place, or taking on some roommates. A little can go a long way in this department.
Cars are deceptively expensive. Not only do they cost a lot to buy, as an owner you are then stuck paying for pricey auto insurance, gas and repairs (which always seem to come at the worst moment). Saving money would be monumentally easier if I could get rid of my car and solely use public transport for commuting. Or maybe by a bicycle and be richer AND thinner.
Unfortunately for me I have a long commute that is not conducive to public transport, so I’ll be hanging on to my car for a while still. I’m hoping to offset some of the costs of car ownership by selling my pretty black Jetta before I leave. It’s of no use to me while I’m abroad, and I can always buy another car someday.
School debts, car payments and credit car bills seem to bring down many a would-be traveler. As twenty-somethings we haven’t had a ton of time to rack up debt but we are vulnerable to mismanaging what we have.
The only advice I can give here is to pay down as much as you can as soon as possible. Yes it will deplete your savings momentarily, but you will make up for it in the money you WON’T be spending on interest. Adam at Man Versus Debt has some great advice on how to manage your debt and still travel the world.
I asked some of my buddies on #RTWSoon what the biggest savings obstacles were for them and one kept coming up:
thom_sean: FRIENDS! Easy to cut back food/phone/treats but well meaning: ‘oh come on, what difference will ONE night make?’ A LOT
JohnnyVagabond: That’s an easy one: beer
It’s a tough one for me too. You’re young and awesome; you want to go out with your friends. All of a sudden one drink turns into shots for everybody. You don’t even think about the cost until you get your credit card statement.
Sadly the only way to combat this is that tricky thing called self-control. I do try to remove some temptations by passing on places and events that I know are going to be expensive and capitalizing on free events. I also try to avoid opening a tab at bars (even better: leave your cards at home and stick only to the cash on your person).
I know some of these measures seem drastic. But the truth of the matter is that if you are trying to massively change your life your going to have to make some sacrifices. There is no easy fix just hard work. Hopefully the end goal makes it all worthwhile.
Your turn: any major expenses I missed? How do you drastically cut down?