13 Tips for Saving Money to Reach Financial Independence Early

FIRE sceptics might claim that frugal living is all about living miserably just so you can retire early. That simply isn't the case. It's quite the opposite. It's about targeting your spending to ensure you don't waste money and only spend on what brings most pleasure/benefits.

Frugal is a tainted word that has been tarred with negative connotations. 'Optimal' is actually what the FIRE community should be 're-framing' this part of FIRE strategy/philosophy as. So, if you see the word 'frugal' below, it will be surrounded by single quotes for a reason!

Here are a bunch of quick-fire frugal (or optimal spending) living tips that are going to help you save money, not waste money, so that you can supercharge your investments and hit your retirement good and early. It is absolutely true to say that you cannot 'frugal' your way to wealth but it certainly helps not to waste money and to be mindful about what you're spending your money on.

You certainly can't get rich without upping your income but at the same time some 'frugal' habits are going to keep some extra money in your pocket that you can use for investments and get your money working harder for you so here we go...

Tip number 1 - Sell what you have

Clear out any items around your house that you don't have a need for anymore.

Our homes fill up with the most enormous quantities of useless stuff, but it has never been easier to sell things. You can use eBay Facebook gumtree any of the local band sale places really. If you haven't used it in the last six months you are unlikely to use it going forward and if you find you made a mistake selling that item, well you can always buy another one if the need arises.

Clear out your nonsense your home will be cleaner you'll have more space and your wallet will be heavier.

Tip number 2 - The things you buy are an extension of your time!

Your time gets you money, your money in turn buys you stuff and when you start looking at stuff as a representation of how long you had to work to attain that stuff, you will start looking at products and all kinds of different things in an entirely new light!

Tip number 3 - 'Frugal' living doesn't mean being cheap!

Direct your money at the purchases that bring you genuine value and genuine joy and try to cut out the nonsense that doesn't bring you much value.

Tip number 4 - Create a budget

Analyse your expenses, and I mean everything that goes out the door for the last three months, and you will very quickly see where your money is being spent well and where your money is being wasted. Once you've decided what is being spent well and what is being wasted you can create a budget to maximize the value of the money in your pocket and don't forget, invest as much as you possibly can!

Tip number 5 - Don't be an victim of the advertising industry 

Supermarkets are built and arranged to get you to spend more money than you ever planned to. When you set foot in those mega stores plan your meals on a weekly basis. Batch cook as much as you possibly can and don't forget to factor in a treat or two for yourself! Stick to the plan when you're shopping and try to avoid the enticing advertising and the strategic product placement.

Tip number 6 - Be flexible with your approach to food shopping

This one actually might count as the old negative 'frugal' connotation but if you are maxing out your path to FIRE on a lower income then over the longer term, it could make a difference as to when you reach your FIRE target. Maybe the next time you go shopping drop down to the supermarket's own brand. You might well find that the supermarket brand is just as good as the premium products. If that's the case then you've just saved that money forever.

Tip number 7 - Make big changes to the big ticket items in your life

Think of all the money you could save and invest from avoiding Starbucks or avoiding that designer handbag etc. If you want to make a real dent then look at savings on mortgages, rent, and commuting bills. Those are the things that are going to supercharge the amount of money you can put in the investments to ramp up the compounding effect and retire that little bit sooner.

Tip number 8 - Free activities

Your local area will have tons of free activities put on by your council and other organisations. Just look up your local listings. You will have more fun than you think! In particular if you've got young kids this is a no-brainer. Kids don't give a hoot about paid entertainment.

Tip number 9 - Ditch the Gym membership

This is a controversial one and often features on lists such as this, so let's get it out of the way! Gym memberships can add up over the years. However, this comes back to the central theme of 'frugality'. If you enjoy the gym then you should absolutely go for it! An alternative way to look at the gym is that it is an investment in your health which is way more valuable than any sum of money you can ever hope to amass! 

That being said, it is a simple fact that running on the road is free and you can cover just as many miles outside as you can on a treadmill. There are tons and tons of body weight exercises on the internet. Stacks of YouTube channels that can show you how to do this stuff at home with weights or with no weights at all. Maybe you could break up the gym membership to the first 3 months of the year and then home/park train for the rest of the year. Over the years, these strategies can add up if you are investing and compounding to help get to your FIRE target quicker and finally jack in the job.

Tip number 10 - Negotiate 

Negotiate for everything and I mean from your broadband to your television to Netflix. Service and product providers have scope to offer you a discount to close a deal. We are very backward at coming forward in the UK around haggling but I guarantee if you try this in a few places you are going to turn up discounts for things you didn't even know was possible. Just ask... the worst they can do is say no and if you really feel strongly about it you can always walk away and take your custom elsewhere.

Tip number 11 - Cashback sites 

Compare cashback sites with Amazon and eBay when you buy anything online. Cashback sites offer a great way to get a little bit of money back on essential purchases such as insurance for your car, for your home, or if you're buying a big ticket electrical item. Perhaps your cooker's broken down and you need a new one. Use cashback sites to put a little bit of money back in your pocket.

Tip number 12 - Sleep on it.

If you see something you have an 'impulse' to buy, wait at least a day or two, or a week or two and see if you still want it after that period of time. Think about of you actually need it and ask yourself if you don'y actually need it if it will bring you joy or value of some kind. You might find that urge to buy dissipates.

Tip number 13 - Invest in yourself!

Use free resources to upgrade your skills so that you can earn extra income down the line. Not only will you be learning something marketable and something skilful that you can use to make money but many of these resources are free.

Get yourself onto YouTube and learn some skills whether it be computer programming, learning about accounting, learning to sew, learning to do some plumbing, learning graphic design, anything that interestes you. There's tons and tons of useful information out there that you can up your skill set and get yourself earning more money.