Hi friends! I hope everyone had a fantastic holiday season – whether you celebrated last week or not. I’m sorry for the lack of posts last week, but between work and applications this year I needed some serious R&R. I spent the first half of last week in Mexico with my family, and the second half celebrating Christmas with B’s family. I was also busy celebrating some good news – more details on my big plans for 2016 to come soon!
Now that we’ve caught up, let’s get down to business. When I posted the last Simple Saver Series edition, I promised a wrap-up of all of the 2015 savings challenges, and a tally of how much those challenges could have saved you over a year. Spoiler alert – it’s nearly $5,000!
As a refresher, the Simple Saver Series is a monthly spending challenge I hosted on the blog in 2015. The idea is to maximize savings by revamping our little, seemingly innocuous spending habits. Think Starbucks in the morning, buying lunch at work, etc. The good news is, that also means small changes – like cutting out one or two coffees a week – can add up to big savings too.
For every month in 2015 I posted a suggested spending habit to cut back on. The idea was to try each challenge and see which ones became a more permanent change you wanted to implement. Here’s a recap, and a calculation of how much you could have saved if you stuck to each one for a month or for a whole year (I’m going to use conservative estimates):
About 1% of American spending goes to alcohol, or $454 a year on average. That’s not a ton, but it’s not negligible either. And I’m guessing that for many of us young adults, our alcohol spending makes up an even higher percentage. So I attempted to stay totally sober in January.
Note how I used “attempted?” Turns out I like red wine too much to give it up completely. But I also realized in January that there were plenty of times I didn’t really need a drink, and skipped it. Since then, I’ve cut back on my alcohol spending, not cut it out completely. But that’s the point of the Simple Saver Series – even reducing your spending habits slightly is a positive change that will impact your savings.
- One Month Savings: 1 drink per week @ $10 each = $40 per month
- Annual Savings: $520
February: Skip Starbucks
This one should be pretty self-explanatory. February’s challenge was to brew your coffee at home instead of buying it on the way to work. This is a habit I stick to throughout the year, partially because I need my caffeine fix well before I leave the house.
Missing your fancy drink? Buy a milk frother! I’m obsessed with mine and it pays for itself in about 10 lattes.
- One Month Savings: 1 coffee per work day @ $3 each = $60 per month
- Annual Savings: $780
(This could actually be higher – a 2012 study calculated that American workers who regularly buy coffee spend an average of $1,092 a year).
March: Minimal Manicures
Sorry ladies, this is another pink tax situation. Even if you’re frequenting one of the cheaper establishments (and those are becoming ethically questionable), painting your nails yourself would save you quite a bit.
- One Month Savings: 1 manicure per week @ $18 each = $72 per month
- Annual Savings: $936
April: Curb Impulse Buys with a Shopping List
How many times has this happened to you? You walk into Target to grab some paper towels, and the next thing you know you’re walking out with a pair of shoes, 2 bathing suits, and scores of random snacks. Impulse shopping is real, my friends.
Next time you go into a store rife with impulse shopping temptation – the grocery store, Target, etc. – try taking a shopping list with you. Write down exactly what you need ahead of time, and stay laser focused on finding those items. You’ll save time and money.
- One Month Savings: 1 impulse buy per week @ $5 each = $20 per month
- Annual Savings: $240
May: Closet Clean-Out
In a post last year I rounded up just about every method you can use to turn your old clothes into cash. You’d be surprised at how much selling your old clothes can net you – I sold $500 worth of clothes and shoes this year! I didn’t even sell anything particularly fancy to achieve that – each item sold for an average price of $20. Anything you don’t sell you can donate, and then deduct its value on your tax return if you’re using itemized deductions.
By the way, I just read The Life-Changing Magic of Tidying Up and it truly was life-changing. I highly recommend it if you need help de-cluttering. The book will tell you to get rid of anything that doesn’t “spark joy.”
- One Month Savings: 1 clothing item sold per month @ $20 each = $20 per month
- Annual Savings: $240
June: Quit Shopping out of Boredom
This is much like April’s challenge, only it involves staying out of the store altogether. Instead of shopping (either in person or online) when you’ve got nothing to do, try going for a walk, reading a book, or binge-watching reality TV (no judgment as long as it’s free).
- One Month Savings: Let’s estimate $30
- Annual Savings: $360
July: Cut Subscriptions to Save Money
For those subscriptions that you don’t use, don’t need, or have way too high of a cost per use (I.e. if you only go to the gym 2 times a month, your $50 monthly membership costs you $25 per use) thinkg about ending them or replacing them with a cheaper alternative. After I tried this exercise I realized I really didn’t use my Birchbox samples and cut off my subscription.
- One Month Savings: $10 monthly for my Birchbox example – this may be more depending on what you cut
- Annual Savings: $120+
August: Now Walk it Out
Next time you’re tempted to call a cab, try walking home instead. Subbing in just one cab ride per week for a walk can make a big difference (PSA: it’s good for the environment too).
- One Month Savings: 1 cab ride per week @ $10 each = $40 per month
- Annual Savings: $520
September: Minimize Investment Fees
You might not realize it, but most of the investments in your 401k are charging you an annual fee to invest in them. Fees tend to range anywhere from 0.05% for a passive index fund, up to 2% for an expensive, actively managed mutual fund. That might not sound like a lot to you now, but the problem is that those small fees can really add up over time. This post shows you how to switch your investments from ones with high expense-ratios to lower cost funds.
- One Month Savings: N/A
- Annual Savings: $5,000 account x 0.5% expense decrease = $25
[Note: The savings for this challenge won’t really show up in a year, but it’s one of the most impactful challenges over the long term. Reducing your average fee spending by 0.05% can mean an extra $30,000 in your pocket at retirement.]
October: Try Easy Weekend Make-Ahead Recipes
Eating out can be one of the biggest hits to your budget. But cooking dinner is a lot easier said than done when you’re just getting home from work and are starving. That’s why I make a lot of meals ahead of time over the weekend, and cook in large enough quantities that I can enjoy the dish for lunches and dinners throughout the week. This post rounds up a lot of great make-ahead recipes to try.
- One Month Savings: 2 takeout meals per week @ $12 each = $96 per month
- Annual Savings: $1,248
November: Whoops, looks like I missed this month
December: Negotiate Your Bills
You might not have known that just about every one of your bills is negotiable – that includes cable, newspaper subscriptions, insurance, and more. December’s post featured tested strategies to lower your monthly bills.
- One Month Savings: Reductions on 2 bills @ $10 each = $20 per month
- Annual Savings: $240
The Grand Total
Phew, that was a lot of wrapping-up – let’s tally it all up now.
If you make every one of these challenges a habit for the next year, you’d save $4,709 in 2016!
And I used conservative estimates – there’s a good chance you could save even more money than that. Sticking to every one of these habits may not be realistic for you. But that’s ok! Even just picking one or two new saving habits to stick to next year could easily save you $1,000. Small changes add up!
What’s your savings resolution for 2016?