One of the biggest expenditure can be commuting to work. Just check your current situation and you will see. This is good and easy way how to increase your Saving rate. Remember target is to save more than 60% of your income to retire within 10 years.
For example, here is my current situation.
I travel everyday around 25 km (15.5 miles) to get to work and 25 km to get home. I don’t go by car as traffic is terrible in this area so I go by train.
Train ticket for 1 month cost $180. That’s is a lot right? Just imagine how much this is per 10 years. It is exactly $21,600 only to get to and out of work. It would be nice to save those money for your 10 Years Retirement plan.
So what should you do?
There is many ways how to decrease those cost and I will show you some of those in this article.
Commute by bike.
This is the best way from my point of view. You will save money and also you do something for yourself. I don’t know as you, but I have my best idea when I am alone.
Now what about money point of view? Let’s consider you have no bike (really???).
Cost of new bike is $500-$1000.
Sometimes you won’t go by bike because of rain, snow or any other situation. Let’s consider you will use public transport for 20% of commuting.
Monthly cost of ticket is $180 -> divided by 20 working days you get $9 for return trip.
20% of 20 working days are 4 days per month. So your monthly cost is $36 (instead of $180).
Now let’s finish our calculation. By this example you spend $4,320 just for commuting and let’s think that you bought bike for $680.
It means you will spend around $5,000 for 10 years commuting by bike. This is $16,600 less than original expenditure. Much better isn’t it?
Walking to work.
Any general calculation is very difficult in this case, but I am sure you can understand that this is the best way to save money. There are some points as walking distance, family situation (you should take kids from school) or weather which you have to consider, but at least you should walk as many times as possible. There is literally no cost except of your free time and huge impact to expenditure decrease. One the other hand not so many people have time to spend so much time by walking everyday. For those again -> Commute by bike.
Live close to work.
You should consider move closer to your work in case you can’t walk or use bike. For example, because of long distance. It is important to compare how much you can save and how much is rent cost/house price in new location.
This is the most difficult change from all in our list so you should deeply consider all benefits and negative points before decision.
I think almost everybody can use bike in many situations, but for some reason many people have mental block in their head and they decide to commute by car instead.
You know what? If you really want to retire early you shouldn’t make any excuse and keep your car at home tomorrow. And think about today’s $21,600 expenditure decrease example which can be in your 10 Years Retirement plan account.
Do you have any other interesting idea how to save?
Let’s share that idea with us as well or join us as a writer.