Living on Less 101

There’s a ton of great info out there on how to live on less money, some ideas you may deem as extreme, others are pretty straightforward. Let’s consider this the 101 course and I’ll cover some basics…

Budgets Baby!

Know what you are currently are spending. This is fundamental! Most people don’t know where their money is actually going. There’s lots of ways to do this, here are a few options:

  • YNAB
  • Excel\Google Sheets

Once you’ve got a few months of data, you should be able to get a good idea of where the big chunks of your money are going and what areas you may be able to cut back on.

Debt Destroyer!

If you have debt, especially high interest debt, you need to handle it. I’m not going to go into detail on this as I was fortunate to only have mortgage, student loans and vehicle, all at very low interest rates. Here’s a good post if this topic is a problem you have to deal with: Debt Emergency

Savings Samurai

Calculate your current savings rate. Most folks seem to agree that ideally you should be saving greater than 50% of your income if you’re serious about this early retirement thing. I’ve seen a few different ways to calculate this, but what I go with is: all investment savings (401k, company contribution, HSA, etc) divided by after tax salary plus pre-tax investment contributions.

Ex: 18k 401k + 4k company + 12k after tax divided by 48k after tax + 20k before tax contributions = 34,000/68,000 = 50% savings rate

Budget Bloat

Minimize typically large budget areas. Common areas where most people’s budget goes to are and some ideas to reduce these expenses:


  • Heating\Cooling – Couple degrees warmer in the summer, cooler in the winter
  • Size and location – Do you need as big of a place as you have? Does your location make sense (close to work, parks, public transportation)


  • Vehicle – Do you have more than one car? Can you decrease your costs with a cheaper or more fuel efficient car? Do you need a car at all?


  • Eating Out – If this is a big portion of your budget, is it something you could do less often?
  • Groceries – Are you wasting money constantly throwing things out without using them? Buy less or put more thought into meal planning
  • Starbucks – If you’re a regular customer, consider making your own coffee instead


  • This is a tricky one, try to classify things where it make sense, to avoid this generic category. If there is one or two trends here, ask yourself how important they are to you.

Whatever you identify above, set a goal of trying to reduce a certain percentage. Make sure to invest that money so it doesn’t just get spent somewhere else.

Always remember to pay yourself first,  in this case it’s best to automate your savings so they come out without you having to think about it.

Until next time.


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