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Suggestions and Estimated Savings Over 30 Years
Some ways to reduce expenses:
over 30 years.
Pack a lunch instead of buying.
Cut down on eating out, and frequent trips to the
Cut down on liquor purchases.
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.
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
Do you really need high speed internet? Many providers have lower speeds at lower costs.
Cell phone - do you really need it, or one
each? Do you need that monthly plan, or could
you use prepaid phone cards?
Could you reduce or eliminate your cablevision bill?
Turn down the heat. Turn off the lights and
TV when you are not using them. This saves money
and helps the environment.
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
Make more meals from scratch instead of using
expensive pre-packaged foods.
Fix it yourself. Do-it-yourself books are available
at the library, and it isn't really as hard as you
Don't buy on impulse, even groceries. Make a
list of what you need.
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?
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.
Do you really need all those movies, and music
CDs? You can listen to the radio and watch TV.
Total of all above estimated cost savings -
before tax on interest
Accumulated savings outside RRSPs after tax on interest
Accumulated savings outside RRSPs after tax on capital gains
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!