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Early retirees and financially independent people share their top savings tips

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Early retirees and financially independent people share their top savings tips

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?

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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.”

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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.

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“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.

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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.

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“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.”

Finance

Man who built Guernsey finance charity retires

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Man who built Guernsey finance charity retires

A charity has announced its new chair following the retirement of its founder.

Peter Neville worked for more than five years to set up Guernsey Community Savings, which first opened its doors in September 2020 to support people who were not able to access mainstream banking, staff said.

Former banker James Ellis is taking over the role. Neville said: “James brings exactly the right blend of financial services experience, charitable involvement and community understanding.”

The charity had helped about 200 people, who would otherwise have been excluded from the financial system access, to accounts and linked debit cards, and offered money‑management guidance to many more, staff said.

Neville said: “The initiatives now being discussed, together with the additional features offered by the new money‑transmission platform, reassure me that James’s vision aligns perfectly with the aims we set in those early days.

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“I wish the board and GCS staff every success as they take the charity forward.”

Ellis said: “‘The creation of Guernsey Community Savings in 2020 was only possible because of Peter’s unique set of qualities that enabled him to create a talented team and the structure to tackle the issues facing the financially excluded in our island.

“I was delighted when he asked me to continue with his work and further expand his vision, which I share, to provide help in the form of bank accounts, debit cards and financial education and to realise our ambition to provide grants and soft loans where needed.”

He added he was pleased Neville agreed to remain involved with the charity as life president.

Follow BBC Guernsey on X and Facebook and Instagram. Send your story ideas to channel.islands@bbc.co.uk.

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Finance

Hong Kong’s first 5-year plan to tackle economic gaps, boost jobs: Paul Chan

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Hong Kong’s first 5-year plan to tackle economic gaps, boost jobs: Paul Chan

Hong Kong’s first five-year plan will map out concrete paths to address the city’s shortcomings and magnify socio-economic benefits, including how artificial intelligence can create quality jobs, the financial chief has said a day ahead of the public consultation on the blueprint.

Financial Secretary Paul Chan Mo-po said on Sunday that the key task for the blueprint would be the upgrading and transformation of the city’s economy, vowing to press ahead with the Northern Metropolis megaproject and make it a “spatial carrier for deploying emerging and future industries”.

“Hong Kong’s five-year plan aims not only to provide greater momentum for economic development and better application of technology, but also to promote more inclusive and equitable development in society, provide residents with more quality employment opportunities, and create a better life,” he said in his weekly blog.

The efforts to formulate Hong Kong’s first five-year plan are led by Chief Executive John Lee Ka-chiu, and the blueprint is expected to be finalised by the end of 2026.

Lee said last week that the public consultation for the outline would begin on Monday, confirming an earlier South China Morning Post report.

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The public can submit views via dedicated websites during the two-month period, and the government would hold multiple sessions to gather input from various sectors, including lawmakers and industry representatives.

The blueprint aims at aligning Hong Kong’s development with China’s 15th five-year plan, which positions the city as an international hub for finance, shipping, trading, innovation and technology, offshore yuan and global talent.

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Finance

2 Awkward Talks to Have With Your Kids Before They’re 18 (Not ‘That’ One)

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2 Awkward Talks to Have With Your Kids Before They’re 18 (Not ‘That’ One)

As children reach adulthood, many parents assume they’ll still be able to step in when needed. In reality, that dynamic often changes quickly. Once a child turns 18, parents can lose both visibility and influence in ways they may not expect.

That’s why I suggest having two difficult conversations that can make a meaningful difference: The first helping your children build financial literacy, and the second ensuring you can support them effectively in a medical emergency.

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