Today concludes my second week of implementing some new spending habits. I followed all my desired new spending habits the past two days. In total I have saved an estimated $300 over the past two weeks.
Psst…If this is your first time at my blog please read this post first.
So what does that mean?
At my age (26 years old) investing $600 a month utilizing my income investing strategy would produce some serious income down the road.
If I was able to maintain that investment rate of $600 a month which is $7200 a year. Using a dividend yield of 8% without any increases. By the time I am 65 (39 years left) I would have a portfolio that would throw off $147,564 a year in income.
Calculated using dividend income calculator found on Buyupside.com
After reviewing my finances a few weeks back I realized how much money I was spending every day on small purchases that didn’t really add anything to my quality of life.
I decided two weeks ago that I would try to make some changes to my daily spending.
I decided on four changes to make
- Quit smoking and start vaping
- Stop drinking energy drinks and make my own coffee
- Start bringing my lunch to work by utilizing meal prepping
- Eat dinner at home instead of picking up food on the way home or eating out.
I have not been perfect but I am proud to say that the past two weeks I still managed to save an estimated $300.
I have been pretty consistent about not smoking cigarettes and drinking my home made coffee. The times that I ate out were better experiences than before. I went out to eat dinner with my father and brothers. Took my wife out for a lunch date. And shared some private time with my daughter enjoying burgers.
I will admit however that the way I have been tracking my savings is a very simplistic way to look at your finances. I have of course spent some of that money I saved because I have bought food to cook at home and I did pay for my vape, the coils for it and a few different flavors of the vape juice.
I intend to do a more thorough analysis of my current finances and intend to change the way I track my savings in the future. I am still trying to figure out a better way to track and post my results. I am considering switching to how much debt I have paid off.
I decided to use this simplistic tracking method to help motivate me and to help see how much money I was wasting before.
The bottom line is that I have certainly saved money compared to my old spending routine. This is real progress. This is the real goal.
- The unfortunate part is that I was not able to actually invest any of that money. The reason why is because my credit card debt is too high and my short term savings is too low. I think reducing my debt is currently a higher priority than adding funds to my retirement. I also know the value of having some funds not invested to serve as an emergency fund to prevent having to take money out of my retirement accounts.
- I was able to pay off some credit card debt and move a little to my short term savings account. This is real progress.
- I did make some changes to my stock portfolio to increase the income it produces. I have probably increased my risk a little adding to my higher yielding holdings. My goal was to increase the income to allow greater compounding through reinvestment of the distributions. I may not be able to add funds to my investment portfolio for a little while I focus on paying off debt.