When we started our FI-journey, saving money was (and still is) priority number ONE.
We love seeing our costs go lower and lower each month, freeing up more cash to put to investments or just building our emergency budget.
We discovered new ways of saving money on various aspects of our lives. (Did you know drinking tapwater instead of bottled water can save you up to €400 yearly?)
When FI was just a vague concept for us, we looked into the typical money-saving tips you find everywhere on the internet such as; eat out less, shop discounts at the groceriestore, start biking more instead of resorting to your car and so on,…
We had the feeling these were good to start with, but didn’t go far enough. What’s the use of biking to work once a week if you’re still paying for your car that’s sitting idle on the driveway? Why shop discounts if the advantage is marginal?
We knew we had to think further if we were going to tackle this FI thing head-on and not just save €50 more a month. (Which would make our FI journey longer than life itself)
So we tackled the big guns first; rent, car, utilities and groceries. Our house in the suburbs was nearing the end of contract and we wanted to move closer to the city again, just for convenience.
The city is expensive yo! Our rent was 650 a month, the new house we set our eyes on was 780 a month. That alone would be an increase of 20%! We were planning on downscaling, not upscaling our costs!
So we worked out a radical plan.
The house we were renting had an extra room, so we looked for a roommate! Having a roommate cut our housingcosts by a third, instead of the full 780 a month, we now pay €520 a month. That’s 33% LESS than before while getting all the benefits of living in a city.
We were happy with the extra amount we saved because of this, but boy were we on a roll now!
We started questioning our car, did we actually need it? When we moved to the new house, we started counting the times we actually needed our car. The result? Living in the city brought another benefit along; we used the car 2 times a month! We did everything on foot or with a bike so we could very well do without it.
The car took up a large portion of our budget for a long time. Gas, insurance, upkeep and maintenance aren’t cheap!
So we sold it and took on the experiment of doung everything with public transport, bike or on foot. We even got ourselves a little bike-trailer to go to the store! We’re half a year in, and so far, so good.
Our costs went down almost immediatly, instead of spending around €300 a month, we freed up €300 to invest! Another major win!
We won almost €600 on two big components of our household, areas that are often taken for granted or overlooked when thinking about ‘spending less’.
We went even further, we went shopping for the cheapest gas and electricity supplier out there and found a fixed-uear contract that saves us almost €400 a year. I’m a bit of a freak on these things, so i started tracking our gas usage every month to see when we were spending the most and how we could cut back on our bills.
We did the logical things; changing our old lightbulbs by LED versions, optimizing our boiler settings,… but we were still spending a lot of money on gas and electricity…
So we did the thing millennials are best in; thinking outside the box!
We looked at exactly how we used our heating and our water. One of the most striking discoveries was that we both liked to wash our hands with hot water!
(We have a boiler that activates itself once you activate warm water in the house.)
We asked ourselves; would it make a difference if we washed our hands with cold water instead of warm water?
Time for a test! We spent the next month paying attention to use cold water when we washed our hands. The result? We spent 15% less on our gas!
We were astonished by the big result such a small insignificant change could have. It means we spend €120 less on our utilities bill a year!
Making big and small changes is part of the journey towards Financial Independence. We’re still looking for possibilities to cut back on costs and save money. But at the meantime we still want to be able to enjoy life.
That’s why we focussed our attention on the big three: housing/utilities/transport. If you’re able to cut back significantly on those costs, you can ease up about spending €6 on a double espresso once a week.
Quality of life has always been important to us, so cutting back on those major costs and thinking outside the box freed up almost half of our original household budget. Meanwhile we still allow ourselves the pleasures of everyday life and we love every moment of it.
Of course, cutting back even more frees up even more money for investments and savings, but do you really want to spend your days counting pennies untill the next paycheck comes around?
We made a budget for every expense in our household and try to stick to it, but having a budget doesn’t have to mean depriving yourself from every joy in life.
Remember; you can have anything, just not everything!