The easiest way to save more
I just watched a very interesting video from TEDTalks about Behavioural Finance.
The key concept I took away from this is how easy it’d be to save more money without feeling like you’re saving. Every time you get a pay rise, save half of it. That way, you never actually have to try and spend less, you’re just not letting yourself get used to spending your entire pay raise.
Shlomo was talking about just a few percentage points in this video, but I don’t see any reason why it couldn’t be half of whatever your payrise is.
Mr Money Moustache probably wrote the clearest example I’ve seen on how easy it is to retire early. It’s something I’ve been able to do the past four years, live off around 20% of my income. And I don’t feel like I’ve had to sacrifice to do so. I’ve still travelled and haven’t seen winter since 2006. But having been more efficient the past four years, I’m now not far off being able to retire.
It might be a coincidence that I was able to reduce expenses after becoming single in 2006.. but hey, I’m not knocking it. Especially when I can pretty much do whatever I want now…