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.

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.

Not every tactic is realistic for every household, but the common thread is to make saving intentional rather than accidental.

Know your numbers and avoid lifestyle creep

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.

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?

And if you start earning more, don’t automatically start spending more.

For New York City couple Alex Nathanson and Josette Chang, avoiding lifestyle creep was central to reaching financial independence. They chose not to upgrade to a larger apartment, even though they could afford to.

“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.”

Treat your savings like profit

Steve Antonioni, who has saved up “war chests” to fund mini-retirements, recommends thinking about your personal finances like a business.

“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.”

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.

“A business is trying to earn a profit, right? It’s the exact same thing for you — 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.”

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.

Try a “no-spend month”

Michela Allocca, who quit her corporate job to create personal-finance content full time, prefers setting spending “boundaries” rather than strict rules.

Sometimes, those boundaries are about behavior rather than categories. For example, she avoids shopping on her phone and doesn’t keep her credit card near her computer.

“That creates friction in the buying process,” she said. If she really wants something, she has to get up, retrieve her card, and make a more intentional decision.

Another strategy she uses is a “no-spend month,” in which she sets clear parameters for what she is and isn’t allowed to spend on. During one no-spend month, for example, she chose not to buy clothes or beauty products.

“But I am letting myself go out to dinner once a week and spend money on my hobbies,” she said. The idea is that setting guidelines for a defined period of time can make spending boundaries feel more manageable.

Slash the Big 3

To substantially increase your savings rate, take a close look at three major expenses: housing, transportation, and food. Often called “the big three,” these categories are typically among the largest expenses most households face.

“If you learn how to master those big expenses, it will free up a ton of money so you don’t have to stress about the small stuff,” said Josh Lupo, who retired in his 30s with his wife, Ali.

The couple used a strategy known as “house hacking” to offset their housing costs. Other ways to lower the big three include sharing a car or using public transit, cooking meals at home, and living with roommates.

Focus on earning more

Cutting expenses can help widen the gap between what you earn and what you spend, but especially in a high-cost environment, increasing income can be another important lever.

When reflecting on the money moves she made in her 20s that helped her reach millionaire status by 30, Allocca said increasing her income was a major factor. After all, there’s a limit to how much you can cut, while earning more can expand what’s possible.

“The reason I’ve been able to hit these big numbers is because I increased my income outside my corporate job,” she said. “It’s not the sexiest thing — not everyone wants a side hustle or to start a business — but that’s the big driver.”

Still, higher earnings only help if you avoid inflating your lifestyle at the same pace.

“No matter how much you increase your income, you have to avoid lifestyle creep,” Allocca said. “Otherwise, you’re not actually going to make progress.”

Inflation has been dominating the headlines. But what most people are actually feeling in their daily lives is something different: affordability pressure.

There’s an important distinction. Inflation measures the rate at which prices are rising. Affordability, on the other hand, reflects whether your income can keep up with the level of those prices. And even as inflation has cooled from its recent peaks, the reality is that many costs have reset higher and stayed there.

That’s why things may still feel tight. Over the past five years, consumer prices have risen more than 20%, according to the Bureau of Labor Statistics. Even in the past year, prices rose about 3.3%, while real wages increased just 0.2%. For many households, incomes are still playing catch-up.

This gap is where affordability pressure lives and it shows up in everyday life.

Affordability and your pocketbook

Housing is often the biggest factor. Roughly one-third of U.S. households are considered “cost-burdened,” meaning they spend more than 30% of their income on housing, according to the U.S. Department of Housing and Urban Development. Add in higher mortgage rates that have more than doubled since their pandemic lows, and the pressure becomes even more pronounced.

It doesn’t stop there. Insurance premiums have climbed. Grocery bills remain elevated. Interest rates on credit cards and auto loans are significantly higher. And many people are still anchoring to what things used to cost, which makes today’s environment feel even more uncomfortable.

In short, affordability stress shows up in your monthly cash flow, not just on paper.

Inflation and your portfolio

Inflation doesn’t impact all investments equally. Cash, while stable in nominal terms, tends to lose purchasing power over time. Longer-term bonds can be sensitive to rising interest rates. Stocks, especially companies with pricing power, may be better positioned to adapt. Real assets like real estate or infrastructure can also provide a degree of inflation resilience.

The takeaway isn’t to overhaul your portfolio every time an economic indicator changes. It’s to build a resilient, all-weather strategy that potentially can outlast it. Maintaining appropriate equity exposure, diversifying across asset types, and managing interest rate sensitivity are all part of that process.

Planning considerations in the current environment

A strong financial plan anticipates how higher costs affect your life. That means shifting the focus from net worth to cash flow. Can your plan absorb higher recurring expenses? Do you have enough flexibility to adjust spending if needed? Are you managing taxes in a way that preserves after-tax income?

Thinking about moving? Keep these realities in mind

For some households, the most powerful affordability lever is changing the cost structure entirely. That’s why many Americans are now considering moves from higher-cost to lower-cost states. Lower housing costs, reduced taxes, and a generally lower cost of living can improve cash flow and reduce the pressure on a financial plan, especially in retirement.

But a move isn’t a guaranteed win.

Transaction costs alone, related to selling a home, buying another and relocating, can take years to recover. Tax differences aren’t always straightforward; lower income taxes may be offset by higher property taxes or insurance costs. Healthcare access and quality vary by region. And lifestyle factors, like proximity to family or community ties, can be just as important as financial ones.

A move that may look good on paper still has to work in real life.

Practical steps you can take now

You don’t need to make dramatic changes to respond to this environment. But making thoughtful, small adjustments can make a difference.

Consider locking in fixed costs where possible, especially when it comes to debt. Review variable expenses, including insurance and subscriptions. Maintain a healthy emergency reserve to absorb unexpected increases. And focus on after-tax income, not just what you earn on paper.

If your plan is solid, you shouldn’t need to overhaul it; you just need to make smart adjustments.

Inflation tells you what is happening in the economy. Affordability tells you what’s happening in your life. And while prices may not be rising as quickly as they were, they’re still higher than they used to be. A well-constructed financial plan accounts for that reality, builds in flexibility, and helps you stay ahead of your cost of living over time.

You may not be able to control inflation, but you can control how prepared your plan is for it.

Bruce Helmer and Peg Webb are financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on WCCO 830 AM on Sunday mornings. Email Bruce and Peg at yourmoney@wealthenhancement.com. Advisory services offered through Wealth Enhancement Advisory Services LLC, a registered investment adviser and affiliate of Wealth Enhancement Group.

When Anthony Nappa started selling hair products out of the corner of his parents’ warehouse as a teen, he never could have imagined what the side hustle would become. The business has grown from a small eBay store to a multi-million dollar beauty empire that is rapidly expanding its physical presence across Australia.

Founded as a side project in 2012 when Nappa was 19 years old, Oz Hair & Beauty posted $100 million in revenue in the past financial year and now employs more than 500 staff across the country. It has opened 30 new stores in the past three years, with the aim of expanding to 50 stores by the end of the next financial year.

Nappa, now 33, told Yahoo Finance it was a far cry from his original plan when he was a teenager. Back then, he was working part-time as a labourer while studying Commerce at university.

RELATED

“My plan was to live at home, study at uni, while I’m studying, save as much money as possible and by the time I graduate, put a down payment on a house and have a graduate job,” he said.

Advertisement

But when his labouring boss suddenly left the country, Nappa found himself out of a job. His parents, Elio and Venessa Nappa, owned a number of Oz Hair hairdressing salons in Sydney, so he decided to start selling the salon’s hair products on eBay.

Nappa invested $10,000 of his savings into the business and saw sales start picking up when he migrated from an eBay store to a proper website and later Shopify.

“Long story short, it really took off. I was working at the back of the warehouse, and then I had to lease the whole warehouse,” he said.

Do you have a story to share? Contact tamika.seeto@yahooinc.com

Growing bricks and mortar presence

It was during the pandemic that business really “boomed”, Nappa said. In 2019, annual revenue sat at about $24 million, but by 2021, turnover had reached $40 million.

In 2021, Oz Hair & Beauty received backing from billionaire Brett Blundy’s BBRC and Daniel Agostinelli, CEO of Accent Group, which runs shoe retail chains like Platypus and Hype.

Advertisement

Nappa said part of the deal included buying his parents’ store in the QVB, which was then rejigged in 2022 into a fully fledged retail store.

“That increased sales by nearly double. So we thought we’ve got something here now,” Nappa said.

At a time when many discretionary retailers are reducing their physical footprints, Oz Hair & Beauty has taken the opposite approach.

Story continues

Part of the company’s strategy is leveraging its e-commerce data to identify primarily regional locations where customer demand already exists.

“We knew our customers were actually around these shopping centres. For example, we opened in Toowoomba and we knew that was our fifth most popular postcode Australia wide,” Nappa.

Nappa said the company’s physical store presence “complements the whole business”, and they’ve noticed that a new store opening will also correlate to an increase in online business for that area.

“We’re seeing how it’s improving, the business is becoming more profitable the more stores we open,” he said.

Competitor Adore Beauty has also been ramping up its physical presence after opening its first stores last year. It plans to operate more than 25 stores by 2027.

Adore Beauty, which was listed on the ASX in 2020, grew sales by 8.7 per cent to $112 million in the first half of the financial year. It said the growth was driven by retail stores, Black Friday and the growth of skincare brand Ikou.

Despite sales growth, net profit after tax fell sharply by 70 per cent to $189,000.

Advertisement

Beauty business is a family affair

Nappa’s younger brother Guy, 29, used to help out with the business on school holidays and officially joined in 2017. He now serves as chief operating officer.

Their younger brother, Dean, is also involved in the business within Oz Hair & Beauty’s men’s division.

Nappa said the brothers took a lot of motivation from seeing their parents, who are also shareholders in Oz Hair & Beauty, run their own businesses.

He believes working with family means you can “move faster” since there is more trust involved, which gives them an edge over their competitors.

“It’s easy to have those tough conversations when it’s your brother. If you disagree, you can hash it out a lot easier. You can scream at each other and no one gets offended,” he said.

Advertisement

“Family dinners sometimes can be a little bit annoying. We always show up and everybody’s talking about work.”

Get the latest Yahoo Finance news – follow us on Facebook, LinkedIn and Instagram.