If you’re looking to save more, early retirees and financially independent individuals say the goal isn’t necessarily to cut out every small pleasure. It’s to be more intentional about where your money is going, and to make sure more of it stays with you.<\/p>\n
Business Insider rounded up the top savings tips from people who have reached financial independence, retired early, or made major progress toward their big money goals.<\/p>\n
Not every tactic is realistic for every household, but the common thread is to make saving intentional rather than accidental.<\/p>\n
Know your numbers and avoid lifestyle creep<\/p>\n
Regardless of your goal, keeping more of your income starts with knowing your numbers: what you earn, what you spend, and what you actually save. It’s difficult to improve your savings rate if you don’t know how much money is leaving your account each month.<\/p>\n
A good place to start is by combing through credit-card statements and tracking where your dollars are going. First, make sure you’re spending less than you earn. Then, calculate your savings rate. What categories are costing more than you expected? Where could you reasonably cut back?<\/p>\n
And if you start earning more, don’t automatically start spending more.<\/p>\n
For New York City couple Alex Nathanson and Josette Chang, avoiding lifestyle creep<\/a> was central to reaching financial independence. They chose not to upgrade to a larger apartment, even though they could afford to.<\/p>\n “Moving up would be just riding the hedonic treadmill,” Nathanson said. “You get a bigger place now, and a few years later you’ll want a bigger place again. We consciously decided to get off that treadmill.”<\/p>\n Treat your savings like profit<\/p>\n Steve Antonioni, who has saved up “war chests” to fund mini-retirements<\/a>, recommends thinking about your personal finances like a business.<\/p>\n “I think having the right attitude around savings is very, very important,” he said, adding that “even the word ‘saving’ kind of messes you up from the first place.”<\/p>\n People use different terms to describe corporate finances and personal finances. Businesses have “revenue” and “profit,” whereas individuals have “income” and “savings.” Antonioni finds it helpful to draw a direct comparison between the two.<\/p>\n “A business is trying to earn a profit, right? It’s the exact same thing for you \u2014 your savings are your profit,” he said. “You want to run your life in such a way that you’re earning a profit, because that profit is yours. That goes directly to you.”<\/p>\n One way to increase your personal “profit” is to make saving automatic before you have a chance to spend the money. That could mean setting up recurring transfers to a savings or brokerage account, increasing retirement contributions after a raise, or separating spending money from long-term savings.<\/p>\n Try a “no-spend month”<\/p>\n