How to Earn $650,646.36 Toward Your Retirement With a Few Simple Lifestyle Changes

by Alonzo on May 27, 2010

This article is part of our 12 Keys to Lasting Wealth Series – (Key 4: Make Simple Changes to Reach Financial Freedom ).

What’s the best way to save money? How do you save enough money, in fact, that you could significantly fund your retirement?

You might answer, save when you make huge purchases on items like appliances, automobiles and homes.

The problem with this is that most of us only make major purchases once in a while. So while the savings for an individual purchase might be impressive, there just aren’t enough large purchases of this nature to save us serious cash.

Instead, what if we could save a little bit of money on something we purchase frequently. In fact, what if we could save money on something that we purchase every single day.

Each individual savings might be small, but since we’re making the purchase so often the savings avalanche into an unstoppable boulder of cash.

There is such an item – something we buy every day – FOOD.

Your Stomach Holds The Key To Your Retirement

Yes, your stomach may well be the key to your retirement. Small lifestyle changes in the way we purchase food could earn us over half a million dollars for retirement.

Let’s take a look.

1. Rescue Retirement Savings from the Garbage

The typical American family throws out nearly $600 of food each year. That’s right. While the rest of the world struggles to feed itself, we have the luxury of throwing away food.

Simple lifestyle changes such as taking advantage of left-overs, avoiding over-shopping, and checking the temperature inside our refrigerators to prevent spoilage would save us $600 every year.

Here’s the kicker. The savings placed into a retirement account earning 8% interest annually would net a young family $166,832.40 by retirement.

…. but we’re just getting started.

2. Make Store Brands Your Retirement Friends

I love turkey bacon. Over the last year I’ve switched to a store brand that tastes better and costs 70 cents less than the comparable national brand of turkey bacon.

Doesn’t sound like much. But here’s the important point. This simple change saves me 70 cents not just once a week, but every week for the rest of my life.

One simple change may not look like much until you understand the lifetime savings of the change.

How does this help you create a financially sound retirement with little effort?

As with my turkey bacon, store brands frequently taste just as good or better than their name brand counterparts, at a much lower price. I’m not saying that you have to purchase a cart load of store brand items. Just a few.

Let’s say you purchased the following during your weekly grocery trip:

  • Store brand bacon – 79 cent savings
  • Store brand paper towels – 40 cent savings
  • Store brand sugar – 50 cent savings
  • Store brand milk – 40 cent savings
  • Store brand flour – 39 cent savings
  • Store brand bagels – 59 cent savings
  • Store brand rice – 45 cent savings
  • Store brand thin spaghetti – 40 cent savings
  • Store brand instant oatmeal – 65 cent savings
  • Store brand beans 43 cent savings

You’d save $5 a week or $20 a month. Again it doesn’t sound like much, until you consider the lifetime savings. By purchasing just a few store brands each week, a typical 25 year old would save $9,600 by retirement.

But here is the key to super-sized savings. Invested in a retirement account earning 8% annual interest, this $5 weekly savings would balloon into $66,732.96 by retirement.

Simple lifestyle changes create huge financial rewards.

3. Lunch Your Way to Huge Retirement Gains

Why stop there?

How much is it costing you to eat out for lunch every day? Besides the lines, the rush, and unhealthy choices, you’ll spend $7.50 or more each afternoon.

You could pack a delicious and nutritious meal for $4.25 or less, saving yourself nearly $3.25 a day. But who wants to eat the same old boring brown bag lunch day after day?

Here’s where a little creative thinking saves you cash. Don’t settle for boring.

Drop boring mayonnaise. Think pesto, dijon mustard, and roasted red peppers with a few pickle slices on the side.

Drop boring bread. Think pita pockets, French bread, blueberry bagels, or tortilla wraps.

Drop the sandwich altogether. Think delicious left-overs, homemade soups, fresh lettuce with crunchy carrots, cucumbers, and sun flower seeds. All you need is a good lunch box system.

When it comes to afternoon lunches think outside the box. You’ll have the best of both worlds – food that will make your co-workers mouths’ water and savings that’ll make them down right envious.

How much will you save?

Saving $3.25 per day by bringing your lunch to work will net you nearly $780 a year. Investing these savings in a retirement account earning 8% a year would earn the average 25 year old $216,882.12 for retirement.

This is if just one person in the family works. A two career family could save over half a million dollars for their retirement.

4. Dine Out Less To Retire With More

Why just focus on lunch? According to the US Bureau of Labor Statistics we spend nearly 44% of our food dollars outside the home.

What if you went out to eat just one less night a week? A family of four easily spends $25 or more, even at McDonald’s. Cooking a family dinner one night a week, instead of eating out, would save a family of four $15 or more each week. That’s $60 a month.

Again, invested in a retirement account, a young family would see this $60 per month savings balloon into a $200,198.88 retirement nest egg.

Simple changes = big cash.

All told, if invested, the savings from eliminating food waste, purchasing a few more generics, creating great home made lunches for work, and eating out one less time per week, would generate $650,646.36 in retirement savings for the average 25 year old and his or her family.

That’s not bad for small, easy to implement lifestyle changes.

Question: What are some of the small lifestyle changes you’ve made to improve your bottom line?

In the next post we’ll take a look at why when it comes to financial freedom, cash is king.



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