Finance
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?
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.”
A former senior Treasury adviser to Gordon Brown has warned that HMRC is on the cusp of using artificial intelligence to track people’s and businesses income and expenditure without them knowing.
Dr Chris Wales, who was a member of Mr Brown’s Council of Economic Advisers for more than six years, has sounded the alarm while launching a chilling book on the conduct of the Spanish tax authority, Agencia Tributaria.
He is set to join former Labour Treasury minister Baroness Dawn Primarolo at an event next week flagging up how the Spanish model of dealing with tax evasion is about to arrive in the UK suggesting that the door is opening for a “surveillance state.”
In a preview of the future, Dr Wales has claimed that confidentiality in personal life – not just finances – “will simply go out of the window” and asks whether there are adequate safeguards in the UK to prevent HMRC from emulating its Spanish counterpart.
He said: “From 1 January, every single invoice will go through the tax agency in Spain. The Inspector can already obtain all your utility bills and will soon find out which clinic and pharmacy you use and what you buy there, which restaurants you eat at, where you purchase wine and groceries, what kind of car you have, how far you drive and where you park, what flights you take and which hotels you use. Information security? A thing of the past.”
He went on: “I am far from being a libertarian, but I see great danger in the direction in which tax authority powers are going, particularly because the process doesn’t seem to involve our active consent. There is little parliamentary debate about it. In Spain it is simply out of control. In the UK, let’s see.”
Highlighting the CONNECT AI program already used by HMRC in the UK, Dr Wales claimed that the UK is now close to following Spain’s lead.
He said: “HMRC has been using sophisticated information technology for years including an AI system called CONNECT which, as early as 2023, was said to contain more than 55 billion taxpayer-related data items.
“It will be much bigger today with these billions of pieces of information about taxpayers capable of being sorted quickly by AI.”
Dr Wales, who is now senior research adviser at International Centre for Tax and Development, added that HMRC also declines to say what algorithms it uses, under the pretext that if you publish them people will “game the system”, a claim that he suggests does not stand up to scrutiny.
“The system is understood to be used to target evasion. For tax authorities, everyone is a potential tax evader. This means that they believe they have a legitimate reason to collect data about all of us,” he said.
More than two weeks after a fire broke out inside the Lineage warehouse in Boyle Heights, many neighbors have received N95 masks and air purified while mobile health clinics are set up in their area.
But some neighbors said the massive fire that sent toxic fume into the air and created a horrendous stench of rotting food has cost them out of pocket.
Neighbors said they missed days of work while spending extra money on property cleanup. One woman said she spent hundreds of dollars on air purified before they became more widely distributed.
Lineage, the company that operates the burned warehouse, donated $2 million to the California Community Foundation (CCF) so the money can be distributed to the community. The organization said it’s split the money between different organizations.
At least 10 of them are listed as providing financial assistance.
The Boyle Heights Chamber of Commerce said it’s offering small business grants funded, in part, by the group, Inclusive Action for the City.
“We’re hoping that for brick and mortars: it would be up to $3,000. And then for our vendors, it would be up to $1,000,” Miriam Rodriguez with the Boyle Heights Chamber of Commerce said, adding the application is “very straightforward.” “It’s intentionally made that way so that there’s not a lot of requirements. We’re not asking for legal status. We’re not asking for pages of documentation.”
Regions Financial Corp. has expanded its municipal finance and investment banking business with the acquisition of Montgomery-based The Frazer Lanier Company, a firm that has advised Alabama governments, schools and universities on financing for nearly 50 years.
The Birmingham-based bank announced Thursday that it has closed on the acquisition of Frazer Lanier, a full-service investment banking firm specializing in municipal and corporate securities. Financial terms of the transaction were not disclosed.
Founded in 1976, Frazer Lanier has built its business by advising corporations, cities, counties and other public entities on financing projects while serving as an underwriter or placement agent for tax-exempt and taxable bond offerings. Ultimately, the firm helps governments, school systems, universities and other organizations raise money for public projects through bond offerings and other financing strategies.
The Montgomery firm also maintains offices in Birmingham and Florence and says it has served thousands of public and private clients throughout the country.
Along with serving municipalities, Frazer Lanier’s published client list includes the Alabama State Board of Education, the University of Alabama, the University of Alabama at Birmingham, the University of Alabama in Huntsville, Auburn University, the University of South Alabama and Alabama State University, along with numerous city and county school systems across Alabama.
Regions said the acquisition supports its strategy of expanding investment banking capabilities and strengthening services for public-sector, corporate and institutional clients. The company said combining Frazer Lanier’s experience with its Corporate Banking and Capital Markets divisions will expand its municipal finance capabilities and provide clients with broader access to capital markets solutions.
“Two of our top priorities at Regions Bank are strategically expanding our services and investing in top-tier banking talent,” said John Turner, chairman, president and CEO of Regions Financial Corp. “By welcoming experienced bankers from Frazer Lanier to the Regions family, we are connecting Regions’ clients with even greater capabilities while advancing our long-term strategy for growth.”
Frazer Lanier will become part of Regions Bank’s Capital Markets division within the company’s Corporate Banking group.
“There’s a natural fit here,” said Brian Willman, head of Corporate Banking for Regions. “Frazer Lanier has built trust by staying close to clients and helping them navigate important decisions. That’s exactly how we approach relationships at Regions. Together, we can expand that model by bringing more ideas, more capabilities and more connectivity to clients across our markets.”
Regions, which has approximately $161 billion in assets, said the acquisition will strengthen its ability to serve municipalities, corporations and institutional clients across its multi-state footprint while expanding its municipal finance and investment banking services.
Sherri Blevins is a staff writer for Yellowhammer News. You may contact her at [email protected].
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