Saving money has been and always will be a major part of my life. I enjoy doing it and it really seems satisfying to me when I look in the bank account and see a bunch of money.
One great way to get more money into your bank account is to stop eating out for dinner and lunch. Let’s say that when you go out for a meal you are spending in around $10 a meal. Now $10 is not that much money correct? Wrong. $10 is a lot of money when you look at the fact that if you do this every day of the year you are spending $3,650 just on eating food. If you made your meals at home it would cost you a fraction of the price and would save you a whole bunch of money. Worst part is, a lot of people go and eat out for lunch and dinner. Keeping the $10 meal going you are looking at $20 a day, that’s $7,300 a year on just food!
Imagine going on 7 one week last minute deal vacations a year. That would be lovely wouldn’t it? Well… if you stopped jamming all that unhealthy food into your face you could afford to go on seven, yes seven vacations a year! You could then enjoy shoving as much food as you wanted into your face because you would be at an all inclusive resort somewhere warm and beautiful.
Even if you didn’t want to go on 7 separate vacations you could spend that money on all sorts of wonderful things. Save up for 2 years and you have $14,600, which could make a nice down payment on a house. Heck you could almost buy a new car with that. You could go out and enjoy life a lot more. You could put it into the stock market and double that money if you were lucky. By god you could even go ahead and put it into your retirement savings account! If you are 20 and put $3,650 away for 30 years… when you are 50 you have put away $109,500 and that is without interest. If you put that into a high interest savings account with a 4% interest rate then you are looking at a beautiful $106,209 in interest which will give you $219,359! Now maybe you are thinking well that is not enough for me to retire on. I full heartedly agree, that only gives you $8,000 in interest and that’s not nearly enough. However this is just money that you have saved from not eating at McDonalds or wherever. If you have a savings plan on the side where you put money towards your retirement you just add the $3,650 to that money. If for example you did your retirement savings at the same amount ($3,650) you would have $7,300 a year you are putting away, you have $219,000 in the bank by age 50. With the 4% interest on that though you then have $212,417 added to it giving you a total of $438,717! This isn’t too bad now is it? That gives you $17,548.68 in interest. But wait what if you are one of those guys that spends $20 a day? Well you save $7,300 a year. You also put $3,650 away each year towards retirement giving you a total of $10,950 in retirement savings annually! Well that gives you $328,500 by age 50 without interest. Interest earned would have been $318,626. How about your grand total? $658,076 sounds pretty good don’t you think? That is $26,323.04 in interest.
As you can see, saying no to fast food could mean you retire a lot earlier in life. These numbers are all based on the idea that you retire at age 50 if you start saving at 20. In case you wanted to know what your savings would look like at 65, let’s take another look.
For the guy saving only $3,650 a year he will save $164,250 with $304,889 in interest. This will give him close to half a million, $472,789. This means he makes $18,911.56 in interest in his last year!
Buddy saving $7,300 well, he ends up saving $328,500 in the bank and that gives him $609,778 in interest. Meaning he has nearly a million dollars in the bank! That’s right he has $945,578! That means that he makes $37,823.12 in interest his last year.
And the smart guy who saves $10,950 annually, well he puts away $492,750 during that time. It will give him nearly a million dollars just in interest! That’s right he has $914,667 just off of interest!! That gives him $1,418,367 in total! Meaning he makes $56,734.68 in interest in his last year.
You see, it’s just that simple. Not much to it, cut back on the stuff you don’t need and you can retire rich.
