Let’s talk more about budgeting. You know by now how to budget like a Millennial Millionaire – use percentage budgeting for after-tax income. As you advance in your budgeting skills, continue to find ways where you can cut down costs in your daily life so you can save even more. This is my personal list of 14 ways that I currently save or have previously to cut out excesses. How can you get started? Start small, and pick at least 3 to begin with and then move forward with even more of these!

Here’s my top 14 list of how you can start saving right now.

  1. Brew your coffee at home. $50/month. Go to your local grocery store and pick up some freshly ground coffee beans or K-cups! Start to make it a morning routine to brew coffee instead of going to Starbucks. A cup of coffee at Starbucks can cost you $2.50/day.
  2. Brown bag lunch to work. $200/month. Make your lunch instead of going out to lunch every day at work. Eating out can cost around $10/day.
  3. Eat dinner in. $300/month. What’s better than a home cooked meal? Keep it simple: buy some salmon fillets, season them and pair with vegetables, and pop into the toaster over. Voila, dinner is served! Eating out can cost you around $15/day.
  4. Split rent and bills with a roommate. $1,000/month. Average rent in Chicago for a two bedroom can be around $2,000. Get a roommate, and split it down the middle!
  5. Cancel cable and switch to Netflix/Hulu. $110/month. A ton of great TV shows are created exclusively by or are streaming on Netflix and Hulu, and monthly memberships are $8-12. So get a Roku or Apple TV and start streaming! Get rid of expensive cable, which can cost around $150/month if not more or less.
  6. Don’t take Uber/Lyft. $200/month. Take quality public transportation if you can. An average Uber/Lyft ride can cost you around $10. Get on the train or the bus instead!
  7. Get rid of expensive gym memberships. $70/month. Gym memberships can be pricey. Check out if your job offers you a work gym or subsidies at other local gyms. Or even better, go for a run around the block and lift weights at home! Monthly rates at the Fitness Formula Club gyms in Chicago start at around $70/month!
  8. Discard unused magazine/newspaper subscriptions. $50/month. Why are you paying for things you don’t read? Or even worse, why are you paying for paper editions?! At least go all digital or just scrap whatever subscriptions you aren’t reading regularly.
  9. Save paid-off student loan payments. $300/month. Let’s say you finished paying your student loans. First off, congratulations! But second, literally the month after you’re done paying, just deposit the money into your savings instead of your creditor! The average student loan for a 4-year public university is around $300/month.
  10. Save paid-off car loan payments. $300/month. Same as above, re-route your payments to yourself instead of your car dealership!
  11. Turned in your car? Save the gas and insurance. $200/month. Did you decide you don’t need a car anymore – maybe because you live in a big city now with great public transportation? Then save what you would have paid on gas and car insurance.
  12. Save your discounts from retail store shopping. $50/month. It seems like retail stores have discounts all the time, and you can save big especially on holiday weekends. I’ve found that the receipt will tell you how much you saved – so tuck those savings away!
  13. Save your savings from grocery store rewards programs. $100/month. Same as above, but with grocery store or any store that has a rewards (non-credit card) program. Your receipt may state how much you’ve saved – so save those, too!
  14. Tuck away all salary increases. $70/month. Got a salary increase recently, because of a promotion or just a merit increase? Don’t spend the increase, instead save it!

Total savings: $3,000!

 What can you do with $3,000 in savings every month (in order of priority)?

  1. Most importantly, you can route them to 401(k) savings! Increase your 401(k) contribution amount. You can max out your 401(k) with $18,000/year, which is $1,500/month (=$18,000/12). You could take $1,500 for these savings and add them to your 401(k) and therefore (1) meet the annual max and (2) still have $1,500 in savings left over!
  2. You can put the money into an emergency fund! The general financial advice is to save 6-9 months’ worth of income for an emergency, such as loss of a job, etc. If you are making $47,000/year, that’s around $35,250 (=.75 x $47,000) you need for an emergency fund. Yes, that seems like a lot, but if you routed $3,000 into an emergency fund, you’d have your entire emergency fund saved in 12 months (=$35,250/$3,000)!
  3. You can live a little bit more luxuriously than you are now. So, for example, while I said that you should spend no more than 35% on housing, maybe you want to live somewhere a little nicer. Once you’ve found the funds to do it, then feel free to bump up your allocation to housing – and enjoy that nice pool in your new digs!

For more on budgeting and saving, check out these articles, too:

  1. 2 easy ways to save $250 right now to have $2,500 tomorrow
  2. 4 budgeting tips to help you save big in your 401(k)
  3. 4 brilliant ways I saved $12K in 2016 – and you can too!

Follow me on Twitter @MatthewKMiller.

Want to learn more? Pick up a copy of my book …

From Millennial to Millionaire: DIY 401(k) – 5 Do-It-Yourself Steps for the Digital Generation to Design and Manage their 401(k) on Amazon