Saving money can be hard–trust me, I’ve been there.
It feels like you’ve got a million different bills that all need to be paid, and by the time you treat yourself here and there to cope with the stressful job you have, you end up with about the same amount of money you had at the beginning of the month.
The key to getting that first 1K saved is the automate as much as possible–so you don’t have to make any decisions on a day to day basis. Just go with the flow and you end up hitting your goal.
In this case, the hypothetical goal we are working towards is $1000 over the course of three months, which requires us to save around $333 per month.
For our example, I will assume that we want to cut that amount from our budget, and not try adding more income into the mix.
To save a few hundred bucks per month–the top items I’d look at in the budget are:
- Driving habits
- Your Electric Bill
Let’s start with driving habits–this one is going to shock you.
Saving $200 per month by driving less and biking more
If you’ve spend any time online reading financial forums, you’ll have undoubtedly stumbled upon folks recommending biking over driving in order to “retire” early, or live more frugally.
When I first started learning about the true cost of driving, I’ll admit I was turned off.
I like driving–always have and always will. I like getting out on the road,
But, at least now I’m aware of how expensive it really is to drive. Let me explain…
Driving has two major costs: gasoline (or electricity if you’ve got one of those) and car maintenance. It also has the actual cost of the car–and most people are on payments.
Car payments are a whole other rant entirely-so for this exercise we will just focus on the gas and maintenance for the car.
Now, I work from home but I tend to drive a lot.
Back in January, I decided I wanted to try to car minimal for just 30 days. What it would be like to only drive the absolute bare minimum for the month.
During this month, I only used one tank of gas for the car–which at the time cost around $35 or so.
Any time I wasn’t driving , I was riding a bike that I purchased used for about $65. Now typically, I was spending a couple hundred bucks per month on car maintenance and around another $120 or so per month in gasoline costs.
During that month that I focused on biking–I saved about $100 for the month just on gasoline.
Now with the way I have my car repairs budgeted, I was spending approximately $1.50 in maintenance and repairs for every $1 that I was spending on gasoline since I had an older car that required more to keep it on the road.
I estimate that I saved about $130 or so in car repairs by driving less that month (rough numbers of course).
Between the gas and repairs savings, I estimate that I could have kept that lifestyle going and saved myself about $215 per month in expense but biking more and driving less.
And I think this is a fairly conservative number.
Biking more and driving less can also mean you can drive a less expensive car since you don’t need the latest and greatest if you’re hardly driving anywhere.
Now I realize, I have an advantage because I don’t need to commute to work–but I still there are ways to save money by combining trips, walking more, and biking more where it makes practical sense.
Goal Checkin: By biking more and driving less, we saved ~$215 per month. We need to find another $118 of savings in our budget per month in order to hit our goal os $1000 in 3 months.
Save money by turning off the damn AC once in awhile
I’m a big fan or climate control–what a great invention. That being said–one or two degrees on your thermometer can make a big difference on your electric bill–which can lead to pretty large savings every month.
I normally keep my AC set around 74 degrees during the day and at night, I like to turn it way down to 70 or so.
During the summer months, this means I really have to pay for this luxury.
Luckily, I have a smaller place so the impact is relatively minimal, but if you’ve got a nice size house and it’s a bit on the older side, you could really be paying through the nose.
On the months where I take a trip and leave, I turn my AC up to about 77 and let it sit there morning and night. I don’t have a smart home or any of that fancy stuff, so I just set it and forget it.
One time I was gone most of the month on a trip, so I could really see what the impact was on the electric bill with the AC being turned up, and with us not using anything else for awhile.
I found that the bill decreased by around 20-25%. It’s hard to pinpoint exactly what impact the climate control difference had on the savings–but my guess is that it was most of it given how the electric company breaks down my usage costs (they have an interface for this).
In the state that I live in, people spend on average of $207 per month on their electricity bill.
If you assume a 20% savings on this number, you could expect to save around $40 per month by changing your habits around setting the thermostat.
Goal Checkin: We’ve now found an additional savings of about $40 per month–getting us to $255 per month in savings toward our goal of $333 to hit 1K in 3 months.
Finishing the Job of $1000 in 3 months
If you’ve been following along–we are still a little short of our goal. We’ve got another 78 bucks to find in our budget to finish the job.
For the remaining amount–I’d look toward the following items to cut back on:
- Cut back on clothes shopping for one month
- Stop paying for that one streaming service you barely use
- By less pre-packaged groceries and prepare more food at home
Any of these things, even if done half-assed–will get you another $100 in savings per month pretty easily.
As with all things–start with the items that you’re least likely to care about losing and work from that point.