Some ways to reduce expenses. Note that these estimated amounts are about 4 years old, and the savings are likely MUCH higher now, in 2026:
| Cost Cutting Measures | Estimated daily savings |
Savings accumulated @7.5% over 30 years. |
| Pack a lunch instead of buying. | $10.00 | $377,408 |
| Quit smoking. | $5.00 | $188,704 |
| Cut down on eating out, and frequent trips to the coffee shop. | $3.00 | $113,222 |
| Cut down on liquor purchases. | $1.00 | $37,741 |
| Do you really need call waiting, voice mail, etc.? How much could you save by reducing some of the telephone features you use? Or, just check on current telephone options - maybe you can get a better deal from a competitor. | $0.50 | $18,870 |
| Do you spend a lot on long distance calls? Check to see if you are on the best plan. If most of your calls are to one area code, investigate getting a second phone line for that area code, using a VOIP (voice over internet), or internet broadband line. | $0.75 | $23,806 |
| Do you really need high speed internet? Many providers have lower speeds at lower costs. | $0.40 | $15,096 |
| Cell phone - do you really need it, or one each? Do you need that monthly plan, or could you use prepaid phone cards? | $1.00 | $37,741 |
| Could you reduce or eliminate your cablevision bill? We use an antenna - lots of channels! | $1.00 | $37,741 |
| Turn down the heat. Turn off the lights and TV when you are not using them. This saves money and helps the environment. | $1.00 | $37,741 |
| If you have a smart phone or tablet, borrow free e-books from the library instead of buying books, or buy used books at a used book store or thrift store. | $1.00 | $37,741 |
| Make more meals from scratch instead of using expensive pre-packaged foods. | $0.50 | $18,870 |
| Fix it yourself. Do-it-yourself books are available at the library, and it isn't really as hard as you think. | $0.50 | $18,870 |
| Don't buy on impulse, even groceries. Make a list of what you need. | $0.10 | $3,774 |
| If you think you need something, put it on your list. Then think about it. Do you really need it, or will you just be adding to the "stuff" you own? | $0.50 | $18,870 |
| Cut fuel costs by cutting the number of trips you make for shopping or other purposes. Build up your list and don't make the trip until you really need to. Change your driving habits - don't gun the gas when starting, and start slowing down long before the red light or stop sign. | $0.25 | $9,435 |
| Do you really need all those movies, and music CDs? You can listen to the radio and watch TV. | $0.15 | $5,661 |
| Total of all above estimated cost savings - before tax on interest | $17.65 | $666,125 |
| Accumulated savings outside RRSPs after tax on interest | $446,853 | |
| Accumulated savings outside RRSPs after tax on capital gains | $544,220 | |
| Accumulated savings + RRSP tax savings inside RRSPs - pre tax | $865,962 |
Marginal tax rate used is 30%. The accumulated savings amounts are calculated assuming that the annual savings are deposited at the end of each year, and rates of return are compounded annually. In the capital gains case, it is assumed that all the capital gains are realized and taxed each year.
We also did the same calculation using a time span of 10 years, for total savings of $91,139 vs 30 year savings of $666,125. It's interesting to note that the savings over 30 years are 7.3 x the savings over 10 years - the power of compounding!
Check out all of our ideas for saving money and building wealth!
Tax Tip: You would be amazed at how fast small savings can add up, especially if you invest your savings!