Save $1560 or more every year

Well who doesn't like saving money and living life at the same time. There are many articles on the web that have different theories to save money. Couple of them are:

1. Give up basic things like coffee or outside food and save money by preparing them at home.

2. Some say spend as much as you want on the things you need and cut mercilessly on the things you don't need.

Both the approaches are right and could work well for different types of people. However I take a midway of these two approaches as I try to find a balance between the two. I would rather go for Starbucks coffee on some days and will drink home-made coffee on other days. And I would rather buy a few unneeded items sometimes rather than giving up on them altogether. This is what I call a balanced life.

I have been living by this balanced approach and happy to state that I like it so far. Today I will tell you how you can save $1560 a year by using this balanced approach for your lunch. Some of us pack our lunch everyday and some of us eat outside everyday. Now how about living life on both sides of the world but only half and half. My strategy is:

1. Pack your lunch for 3-4 days a week.

2. Aim to eat outside 1-2 days a week including or excluding weekends. Totally your call!

Saving money on Lunch: 

Now lets do the calculations. If you spend at-least $10 on your lunch at a cafe or restaurant. And let's say you work 5 days a week; your lunch spendings will be as follows:

1. 5 days a week for 52 weeks. Let's not bring vacation into picture.

2. If you spend $10 each day then you are spending: 52 * 5 * 10 = $2600 on lunch in the entire year.

Now let's look at 2 different approaches of savings w.r.t your lunch:

Approach 1:

Cooking for 3 days a week and eating homemade lunch.

1. You eat homemade food for 3 days a week for 52 weeks.

2. You save $10 each day.

3. Total savings: 3*52*10 = $1560.

4. Now look at this you got yourself $1560 in savings!

This is a balanced approach where you don't burden yourself with cooking everyday or eating out everyday.

Approach 2:

Cooking for 4 days a week and eating homemade lunch. Let's say you eat home made lunch on Mondays & Tuesdays, take a break on Wednesday, and eat homemade food again on Thursdays & Fridays. There is no doubt in this that you will be saving more in this approach.

1. You eat homemade food for 4 days a week for 52 weeks. Days are M, T, T, F.

2. You save $10 each day.

3. Total savings: 4 * 52 * 10 = $2080

4. You saved $2080 in the entire year.

Added bonus:

Whatever amount you are saving in a year. Add it to your 401k or Roth IRA or mutual funds and earn 4 to 10% increase every year.

Let's do some math here:

1. Earning an average 8% on $1560 in a year gives you a profit of: $124.8 in a year.

2. On $2080 you get a profit of: $166.4

The key here is to save money and invest it for a secure future. Now these are just a few strategies that you can use to save money. You can apply a similar creative strategy to coffee, shopping, activities. This way you are not starving yourself of different things and enjoying life. And at the same time you are saving tons of money that you can invest somewhere.

Hope you enjoyed the article and learnt a new way on how to save some money.

Disclaimer: This is not financial or legal advice. These are my personal opinions that shouldn't replace any financial or legal advice.