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Financial Planning   ->   Save Money   -> Cutting Costs

Cost Cutting Suggestions and Estimated Savings Over 30 Years

Some ways to reduce expenses:

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? $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!

Revised: October 26, 2023


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