Earlier, in the website I wrote on saving money to have money to invest.
I recently retired from a six figure job and now have to spend according to my income. There is a decrease of $1,850 from my working after taxes income. Here are 5 savings I initiated.
- Cutting Cable TV – I used to spend $205 on cable. $100 was for internet high bandwidth and the rest was for TV. I took TV out and reduce bandwidth from 100 to 30 to stream my TV watching. I now pay $81 for internet and Shomi. Shomi provides me with shows and movies. I also use YouTube for various things like music, investing shows and renting or purchasing videos The only downside is sports but I think that may change in the future as the world adapts to streaming and people preferences against cable packages. Savings $105 (accounting for rentals on youtube)
- Getting rid of my car and using car sharing, walking, bike riding and the bus. This saves $125 in insurance, about $100 in gas, and about $30 in maintenance. Also the cost of owning a car can be $100 or more a month if the car is low cost. I will not include this but it should be understood it is a further saving. Savings $255 and additional benefit I often ride and walk which helps the fitness goal I set in retirement.
- Food, when I was working I ate out a lot including lunches on the fly as I worked at different sites. I figure I was spending $35 a day. Now eating at home I can bring that to $20 a day. For a 30 day month Savings $450
- Reduced RSP and TFSA contributions. While working I was putting in about $1,500 a month to my investing accounts. By reducing this to $400 per month, this plus items. My goal now is not as much about what I can put away but to not need to use the investment money for a while. Items 1 to 3 give me over the $1,850 to match my working net take home pay. Savings $1,100
- Having a Roommate – reduce rent by $700.
Total monthly savings here is, $2,600 so maybe I will put more into my RSP/TFSA. Remember these are all after tax so they are more valuable than gross income.
- Investment income Although not savings from the markets In the last 4 years including the first month of 2016 have made and average $723 a month from investing. I am expecting this to go down over the next couple of years because of what I consider an overvalued market. I do not consider this a consistent income but will manage investments to get the most out of them. I figure in about three years this will increase based on my defensive portfolio allocation during overvalued markets.
In the end I can live comfortably saving up to and including item 4 as it puts me with the same disposable income as I had with a six figure salary. I hope to find additional revenue sources and increase investment income with new initiatives.
Please comment or share your ideas on saving on monthly expenses.
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