Saving for retirement and a down payment for a home may seem like it is an impossible task, especially with all of the other bills you have coming in. I am going to share 8 easy ways to save for a down payment on a home and a Roth IRA retirement account. Retirement and home ownership are possible, you just have to rework some of your daily habits.
To fully fund a Roth IRA account you must save $15 a day (that’s $458 per month or $5,500 per year).
To save $5,000 a year, you must save $13.50 a day. Over 4 years you will have saved $20,000 for a down payment on a house.
Thus, with $29 a day you can you can fully fund a Roth IRA (that will grow to over $1,000,000 in 40 years) and save for a down payment on a home.
If you want to know how I came up with these numbers, click here. In the article “How to Save for a Down Payment on a Home and Fund a Roth IRA” I break down the numbers and make it really simple to understand.
So now that you know that all you have to do is save $29 a day, let’s look at 8 ways to find this money.
If you already own a home, these saving principles can be used to save for an investment property. If you are in debt, then these same saving principles can help you pay off that debt.
There are a number of ways that you can use this information.
My goal is to break down the process of saving so that it does not seem like a task that is impossible to overcome.
Saving for retirement and a home can be easy. All it takes is a bit of re-working on your end to find $29 a day!
How To Save $29 a Day:
So how do we accomplish this $29 a day?
Visit the Sustainability Shop to find a ton of ways to save by Going Green! For many of the products, I break down how much you can save per year by making the switch!
1. Eat at Home:
I meal prep 95% of the food I eat.
You can read “Increase the Velocity at Which Your Money Grows: Ways to Save” to learn how you can save $500 to $600 every month by meal prepping.
If you want to learn how easy it is to meal prep and how much time it saves, you can read “How to Increase Efficiency: Time Management Hacks”.
Let’s do a bit of quick math:
Assume a breakfast would cost you $7, lunch costs $12, and dinner costs $16 (I am being conservative here. I am sure many of you have eaten a $20+ dinner).
Let’s add all of that up and then multiply by 30 days per month. That is $1,050 per month on eating out!
If you were to meal prep, you would end up spending around $100 per week on groceries or $400 per month.
That is less than half of what you would spend on eating out!!! Or $600 in savings!
Bang! You just found the $458 per month to fund your Roth IRA retirement account.
An added benefit is that you can portion control your meals, and eat healthier (you know exactly what is going in your food).
You can find other reusable containers and silicon bags at the Sustainability Shop.
2. Cut Back on the $5 Cups of Coffee:
You will never see me with a Starbucks coffee. In fact, a small Starbucks coffee costs more than $5 a cup!
But, we will go with $5 for easy math.
If you buy a Starbucks coffee every morning before work, that would be $5 x 5 days x 4 weeks x 12 months=1,200 each year!
The point here is that you can save $1,200 per year, per $5 increment…
3. Carry a Bottle of Water:
Did you know that 50 billion water bottles are used every year?!?
Let’s save the planet, its animals, the oceans, and our money by using a reusable water bottle.
Soda and flavored drinks are terrible for you anyway… The bottles say “natural and artificial flavors”, but what does this really mean?
Most water bottle companies use regular municipal water in their products, so you are really paying for the packaging and the convenience.
Click here to check out this cool refillable gemstone water bottle!
If you believe in the power of crystals, this is a great way to give your water an awesome energy boost!
For thousands of years, ancient civilizations have utilized the power of crystals to release mental, physical and spiritual blockages, thus facilitating the free flow of energy throughout our bodies.
Click here to read more about the healing power of crystals.
4. Bring a Flask and Pre-Game!
The average mixed drink is probably between $10 and $12.
What really drove home the concept of how expensive drinks are, was that I lived in the land of $20 vodka Redbull‘s for 5 years (Vegas).
So I found that I could save a ton of money by bringing a flask and pre-gaming before I went out.
Yes, I have had a few friends give me a questioning look when I bust the flask out… But halfway through the night, they are asking for a swig…
Moreover, now that I am in my 30’s I find that I don’t really go to clubs and bars anymore. Instead, I find myself at friend’s houses having a cocktail or a glass of wine.
The point is that one cocktail is about the same price as the cost of a meal!
Plus, you tend to drink more than one cocktail when you are out.
5. Enjoy the Great Outdoors!
I love going outside to play. Outdoor activities (like hiking) are free or have a relatively small start-up equipment cost.
A really fun indoor activity is salsa dancing.
What’s really great is that many places offer free salsa lessons!
Another benefit is that salsa is an awesome cardio workout.
In fact, it is a great way to meet new people if you are single, and an even better way to work on non-verbal communication and team building skills if you have a significant other.
Not to mention, Latin dance is very sexy and can help spice up your romantic life.
I used to go to the gym quite often, but now I find that I do all of my exercises outdoors and for free. An added bonus is that you get to experience the outdoors, re-connect with nature, and breath fresh air.
I typically walk 2.5 miles a day, salsa 2x per week, and in the winter I go skiing.
When I worked in an office, I would eat at my desk and walk for my 1-hour lunch. I was able to walk 2.5 miles in that 1-hour lunch break.
6. Cut the Cable:
I haven’t owned a TV since high school. I do have Netflix, and it is so much cheaper!
Additionally, I don’t have to watch advertisements.
On the other hand, I love listening to audiobooks. I mostly read nonfiction, but for fun, I listen to high fantasy and sci-fi books.
I have found that most books take around 14 hours to listen to. That means that you can crush a book every 2 weeks by listening to an audible book for an hour a day!
It is super easy to make your own lotions with shea butter, olive oil, almond oil, and coconut oil.
Instead of cleaning with harsh chemicals like Clorox, use vinegar.
Imagine all of the chemicals being put out into the environment to manufacture Clorox bleach (wipes, sprays, etc.). Now imagine that you are wiping your entire home down with these harsh chemicals.
8. Eat Less Meat:
Reducetarians are committed to eating less meat, regardless of the degree or motivation.
This concept is appealing because not everyone is willing to follow an “all-or-nothing” diet.
This way you can decide when and how much meat you eat. The nice thing about being a reductarian is that it allows for a flexible intake of meat.
A fantastic book that explains how this diet works can be found on Audibles and by clicking this link. The Reducetarian Solution: How the Surprisingly Simple Act of Reducing the Amount of Meat in Your Diet Can Transform Your Health and the Planet“.
Reasons to reduce your meat intake:
- Meat, and especially beef is more expensive than eating fruits, grains, and vegetables.
- There are a number of studies about how red meat increases inflammation in your body.
- Animals are treated with antibiotics and hormones, which we ingest.
- Biomagnification of pesticides. The grain and corn that cows are fed have tons of pesticides, and cows eat tons of it.
- Increase in greenhouse gasses (cows produce a lot of methane)
- Cruelty to animals
Cowspiracy is an environmental documentary that explains how animal agriculture is the leading cause of deforestation, water consumption, pollution, and is responsible for more greenhouse gases than the transportation industry.
Methane is 84 times more potent than carbon dioxide and is far more devastating to the climate than carbon emissions.
The 10,000 Foot Over View:
There are many ways to go about finding $29 a day to accomplish this goal. Homeownership and retirement are within reach and can become a reality.
In an era marked by immediate gratification, saving for the future is a task that you must consciously work on.
Make it easy for yourself and make saving automatic by having your retirement account auto-deduct the $458 per month from your checking account.
Everyone has a financial report card. Make it a priority to constantly check and work on yours.
Take time and money to re-invest in yourself. Re-investing in your financial education is critical.
How are you going to master your financial report card, if you don’t know the rules of the game?
Every dollar has an opportunity cost.
Curious, throughout high school did you learn about how to navigate your personal finances? Or about the importance of living a sustainable lifestyle?
Did they teach you about FICO scores and how much to have in revolving debt? Or what goes into calculating your credit score?
It is up to you to teach yourself about all of these important topics!
Articles that may interest you:
- Increase the Velocity at Which Your Money Grows: Ways to Save
- How to Increase Your Credit Score Right Now
- What is a 529 College Savings Plan?
- Real Estate Loans: FHA vs. Conventional Loans
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