So, I was out yesterday and a funny thing happened. I overheard my friend ask another friend if she liked her new shoes. Curiously, I turned around to look at the new shoes. They were black heels. Were they cute? Sure. Were they worth it? No. This friend has plenty of shoes including other black heels. Why did she need a new pair? My gut reaction to all of this was interesting. Instead of wanting to run out and buy myself a new pair of shoes, I was thinking her purchase was crazy. That was $25 (I'm guessing, of course) she could have put in her retirement account. My friend is young and that $25 would have grown for years as opposed to the shoes she'll wear a handful of times. To top it off, no one noticed her new shoes. If she bought them to impress us, she failed. She had to point out she was even wearing new shoes. No one really cared. Meanwhile, because I don't buy shoes very often, I put $5,500 into my Roth IRA this morning with the money I've saved. I am building my wealth. And it is fun.
I've always been a saver. Somewhat frugal. But I have been very focused lately and want to save more. I have set a goal to retire at 55. That gives me nine years to build enough wealth to live on for the rest of my life. If I increase my savings rate, I can retire in six. That sounds so much more fun than a new pair of shoes.
How am I going to increase my savings this year?
1 - I have plenty of clothes. I've never had a huge wardrobe but I'm completely fine with that. I'm not going to buy any new clothes this year. None. Not shoes or a t-shirt or jeans. I'll wear what I have.
2 - When the weather gets a little better, I'm going to walk to work at least twice a week. It's two miles each way which will help me stay in shape as well as cut down on fuel costs.
3 - I'm going to pick up extra shifts at work. I've already picked up a few this year and I'm hoping to get extra hours going forward. I can easily pay my bills on my regular take home pay (which already has 8% taken out for my 401K - a percentage I want to increase), so every extra dollar will go into savings.
4 - Cut my food costs. I do coupon and buy sale items already but that isn't enough. I know I can get my spending down in this category and I plan to work hard on it this year.
5 - Continue my no-spend January into no-spend February. I found it to be very easy to spend nothing this month (with my only exceptions being food - under $30 out of pocket - and gas (using my grocery store gas promotion, it was only $1.59 per gallon!). I didn't miss the malls or Target or HomeGoods or any of it. I enjoyed staying in (and warm!) and cooking or relaxing. Watching movies and Portlandia (I just discovered this show and it is hysterical!) and Fixer Upper (Chip and Joanna are incredible!). I went for a couple walks in the snow, visited some open houses in the area (I love houses so this is very entertaining for me!), and surfed the internet. It's been a great month and I intend to do exactly the same stuff next month. And the month after. This should easily help me save more.
Those are a few ways I plan to grow my wealth. I want to spend some time formulating a comprehensive plan which I'll share here. Financial freedom is getting closer.