How to Save $600 a Year
By Ryan Healy | January 15, 2008
If you could quickly and easily save an extra $600 a year, would you do it? Here’s how…
Save $50 a month.
If you can save only $50 a month, that adds up to $600 a year. If I told you to save $600 a year, that would sound hard. But saving $50 a month sounds a lot easier. In fact, it is easier.
How can you save $50 a month?
Here are some simple ideas:
1. Stop drinking beer.
I like beer, particularly amber ale. In my corner of the country, Fat Tire is a favorite. But this year I’ve cut alcohol out of my budget. Although I enjoy it, I don’t need it. And I’ll be healthier for it.
Alcohol can be quite expensive. If you drink one beer a day, that adds up to roughly $350 a year, depending on your brand. If you drink more than that, or if you drink wine, you may easily be spending $600+ every year on alcohol.
Of course, buying beer at a restaurant is even more expensive than buying it at the liquor store. Commit to drinking water when you eat out and you’ll save more.
2. Stop drinking soda.
Sodas are probably one of the biggest money holes in America. Because most people don’t have just one can a day. They have two or three or four. It’s not uncommon for somebody to drink a 12-pack of their favorite soda pop every single week.
At this rate, the nominal soda drinker may spend anywhere from $150 to $300 a year on soda. But this is a narrow view. Because a soda drinker won’t just buy cans to drink at home. He will also buy soda when he goes out for lunch or dinner. The cost of soda at restaurants is much higher.
What’s more, there’s almost never just one soda drinker in a household. If it’s a married couple with kids, then both parents and maybe even the kids drink soda.
According to my rough estimates, by eliminating soda, a person could save at least $400 a year on an individual basis. Maybe more if there’s more than one soda drinker in the house.
3. Stop drinking “foo-foo” coffee.
Specialty coffee drinks are expensive. Doesn’t matter if you prefer latte, cappuccino, or frappuccino. Each one will cost you a minimum of $3 a pop. If you drink one a day, Monday through Friday, it adds up to $780 a year. If both you and your spouse have the same habit, double that number. That’s $1,560 a year in specialty coffee drinks.
4. Eat out less.
One meal for two at a restaurant is easily $15 and often more like $20 to $30. To save $50 a month, all you have to do is eat out two or three times less than normal, which is fairly simple.
Invest your savings into a good cookbook if you need one. Perhaps, with a little practice, eating at home will become more enjoyable than eating out.
5. Drive less.
With the cost of gas rising, driving is becoming more and more expensive. When we lived 25 miles from my parents, I calculated that going to their house for dinner was actually costing us about $6 in gas, not counting wear and tear, etc.
Depending on how much you paid for your car, most people are paying between $0.25 and $0.50 a mile. This includes gas, maintenance, and depreciation. If you know how much you’re paying to drive one mile, you can then calculate what it costs to drive to the mall, your job, or the grocery store.
Sometimes people will pay $5 in gas just to go shopping. Crazy, huh?
To save $50 a month, all you have to do is drive 100 to 200 miles less each month. With the average American logging 15,000 miles or more every year, this should be fairly easy to do.
So there you have it. Five easy ways to save $600 a year. If you implement more than one of these ideas, you could save even more.
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Topics: Frugal Living | 15 Comments »
15 Responses to “How to Save $600 a Year”
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January 15th, 2008 at 11:37 pm
Stop drinking beer, this point is right on. Beer is expensive even when brewed at home. I haven’t brewed in years, but I plan to start again this year.
Stop drinking soda, soda doesn’t have to be expensive. Wal-mart only charges 58 cents for a two liter of soda (their brand). As long as you only drink one a day, it’ll only cost $212 at years end.
Stop drinking “foo-foo” coffee, no one should argue with this one—coffee was meant to be black. And when you drink it straight, it’s not too expensive even if you drink it all day long.
January 16th, 2008 at 8:04 am
Aaron – Thanks for your comment. Regarding soda, you said, “it’ll only cost $212 at years end.”
Although I didn’t say this in the post, my feeling is that soda drinking costs more than the soda itself. You’ve got cavities/dental work due to tooth decay, possibly increased incidence of illness, etc.
Refined sugar like that found in soda is detrimental to health, especially long-term. You may pay a fortune in dental and medical bills due to a lifelong soda habit. (Not to mention the neurological effects of neurotoxins like aspartame and sucralose if you drink diet soda.)
January 22nd, 2008 at 3:16 am
[...] Ryan @ Debt Reduction Formula shares five changes that could save you $600 a year. [...]
January 22nd, 2008 at 8:18 am
It really is surprising when you put it into perspective. It was the realization of how much money I was spending annually on coffee at work that made me give it up!
January 25th, 2008 at 4:28 am
“Sometimes people will pay $5 in gas just to go shopping. Crazy, huh?”
Oh, yes, there was a time when I thought nothing of driving 30 to 60 minutes away for an afternoon of shopping and entertainment at the bigger malls. That’s not happening anymore!!
These days a shopping trip has to SAVE me just as much as I spent on gas to get there. Otherwise, we wait until we have at least one other reason to travel that way. Sometimes we end up with four or five errands on our travel days, but that’s the way it goes.
January 25th, 2008 at 7:24 am
Monroe – Reminds me of some women I know who will hit three or more grocery stores in a row to save a couple bucks.
I’ve always thought to myself: “Does the savings justify the gas expense of driving to multiple grocery stores? And is your time worth anything?”
With gas prices higher than normal, the cost of gas has to be factored into any effort to save money that requires driving.
January 26th, 2008 at 4:16 pm
I started packing lunches and bringing them to work, and eating breakfast at home. It saves me over $20 a week, so I instead put that $20 in my ING Direct Savings account. In a year, I will save $1040, plus interest.
January 26th, 2008 at 4:43 pm
That’s great, Tip Diva! When I had a job, I used to pack my lunch every day and always ate breakfast at home. It’s one way my wife and I got by on a single income early in our marriage.
January 28th, 2008 at 3:37 pm
Thanks…my main expense is my car…so I already calculate km cost everywhere I drive
January 28th, 2008 at 11:48 pm
Ryan makes a good point about soda. On top of the drink costing a lot per year, there are also many hidden costs. Dental problems, weight gain, increased risk of diabetes, etc… High Fructose Corn Syrup and Aspartame being the main nasties. Recently I’ve started cutting HFCS from my diet, and it’s subsequently forced me to eat at home more and cook for myself which in turn plays into point #4, eating out less.
Giving up beer AND soda? How about giving up soda.
January 29th, 2008 at 7:02 am
Stephen – You’re right… the negative impact of high fructose corn syrup is only now starting to be publicized. It’s good to eliminate (or minimize) food that contains it.
I don’t drink soda save for a handful of times a year (literally), so that’s not much of a problem for me. But I do enjoy beer, which is why it’s first on this list. Plus, I enjoy the amber ales and red ales… the microbrews, not the light beers… which means my beer costs more.
I haven’t stopped drinking it altogether (I still have a beer when I go to my family’s house and it’s available), but I’ve stopped buying it to drink at home.
March 14th, 2008 at 9:42 am
Stop drinking beer: Absoutely right. It you spend $50 a week on beer, thats $2,600 a year, $26,000 in ten years. Can’t tell a person to stop drinking beer but maybe drink less.
Stop drinking “foo-foo” coffee: Absolutely right again. Coffee can be expensive. If you are need a cup of coffee each day, buy a coffee maker and make your own coffee. I bought a coffee maker with a timer from Walmart for $19.95 and 3 weeks of coffee for $3. It cost me $23 initially but now coffee costs less me than $5 a month and the coffee isn’t bad.
April 9th, 2008 at 7:56 pm
Here’s an idea…how about instead of nickle and dime-ing your entire life for how to save some money on gas here or putting you money into an ING account paying a blistering 5%. On 1040 that’s 52 dollars a year (and don’t give me garbage about every penny counting or compounding). If your financial situation is so bad here’s an idea….stop wasting your time posting these brain busting tips and get a second job. I’m sure you can all save at least 53 dollars a year by turning off your electricity wasting computers.
April 9th, 2008 at 8:13 pm
you know all those killjoys that you never invite anyway because they are too cheap to be fun ? that’s all of you. is your life so boring that you would rather drink crappy freezedried store brand coffee to save 20 a month ? work an hour of overtime a week… problem solved. want to actually do something smark ? get a second job and a brokerage acccount and make 10% a month like the big boys… your welcome. ps… its ok to forgoe a multivitamin.. it will save you 18 dollars a year..
April 10th, 2008 at 8:05 am
Dan and “the stig” — are you related?
You came from different IP addresses, so I assume you are not.
Anyway, my point in writing this article was to show that it’s easy to save $600 a year if needed.
I don’t see how eating out less or driving less means a person is a “killjoy.” Perhaps it means they like to eat at home or dislike driving.
Of course, not everybody has to cut back. And that’s okay too. No need to pinch pennies if you don’t have to.
Thanks for reading!