By Matt Redshaw
In 2015 I saw an opportunity to take my saving to another level.
I signed up for an online expense tracker and was able to see more clearly where my money was going.
When it comes to saving, we have two motivations: to build up wealth for tomorrow, and to spend on enjoying today. There is joy in spending today, but I argue there is greater joy in saving for tomorrow.
The obvious opportunity for me was to reduce food costs. It’s easy to let restaurants cook for you. But what if I decided to only eat out with a purpose – such as spending time with friends and family, and doing so within a budget?
I made one change – meal planning. Planning meals and cooking them in advance has saved me time, made my meals healthier and freed up more money to save. To be exact, I reduced my food costs by $373 in the first month.
Rounding that up, I can save an additional $400 per month. If I keep that going for 20 years, assuming a 7.5% rate of return on my invested money, it will add $216,214 to my wealth. Over 30 years, it will add $516,257 (source: Mackenzie Investment & Regular Deposit Calculator). Not bad for making a simple adjustment to meal planning.
Why not experiment with your finances? Is there $500,000 of future savings waiting in your budget?