How to KEEP 39% of Your Money

According to a survey done by Ladder insurance, the average American wastes $18,000 per year. 

This video is going to go over the things that lose you the most money and how to put more of that money in your pocket and we’re starting now.

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First, let’s go over WHAT people actually waste money on. 

Maybe this list will make you feel better that you’re not AS wasteful or it’ll shed light on where you could… maybe spend a little less??

I wouldn’t call it guilty, because we shouldn’t feel guilty when spending money. I’ll admit sometimes I feel guilty when I make a big purchase. I just can’t help myself. 

But we all are spending money eating out, paying for cable (if you’re a boomer), streaming services, and other recurring monthly spending that we could rein in. 

According to the study done by Ladder insurance, the average American spends $1,497 on non-essential items. 

This $1,500 a month ends up being $18,000 per year that we are wasting.

Now, if the average American salary is $59,000 per year, then that ends up being 30% of your annual gross income BEFORE taxes. 

If you earn $59,000 per year, you are in the 22% tax bracket. So, after paying taxes, you’re left with $46,000 per year. 

And $18,000 of wasted money ends up being 39% of your income. 

So, 39% of your income goes towards non-essential expenses. 

And honestly, you may be perfectly happy wasting 39% of your income. 

Slacker Shawn: But I work hard. I deserve to get to go out and eat dinner with friends. I even deserve that new outfit. Who are you to tell me how to spend that money?

I get it, man. You want to waste your money. I’m talking to the audience. You know – the people who are here to improve their finances.

So, let’s dig into the 5 ways that you can save more money. 

Stop Wasting Food

And the first way is to STOP wasting food. 

Not only is this one bad on your wallet, but I honestly think it’s the one that pisses my wife off the most. 

Nothing makes her more upset then finding food that’s gone bad in Tupperware in the back of the fridge. 

But that’s showbiz baby. 

Get this. 

An estimated 40% of all of America’s food supply goes to waste. 

According to Value Penguin, the average household spends $550 per month in groceries

That means if you are wasting 40% of your food then you are wasting $220 per month just in wasted groceries. 

There’s a couple of good ways to save money on groceries. The simplest one is to make a well thought out list of what you need BEFORE you go shopping and don’t deviate from that list with impulse purchases. 

My wife and I make lists and impulse purchases STILL make up like 20% of my grocery bills. 

Now, let’s see what saving this much money each money and putting it towards your retirement allows you to retire with. 

We’re looking at the average salary of $59,000 and investing in a Roth IRA at 6%. We’re assuming that we’re 30 years old for this example.

If we invest $220 that we save from wasted groceries into our Roth IRA, that ends up being $2,640 per year that we invest. 

According to the NerdWallet calculator, this would leave us with a balance of $350k at retirement. Just by cutting out wasted groceries. 

The second way to stop wasting money is to stop overspending on ride-share apps like Uber and Lyft. 

Don’t overspend on ride-hailing apps

In college, I used Uber all of the time when we would go drinking. But now, I personally only use Lyft or Uber if I’m going to the airport for work. 

But 100 million people use Uber on a monthly basis. 

And the average person is spending roughly $100 per month on rideshare apps. 

But how can you save money when considering rideshare apps? 

One way feels pretty obvious – just take your car. But that’s not always easy to accomplish. 

And sometimes it’s cheaper to use Uber than to pay for airport parking, parking garages, or DUI tickets. 

See what I did there?

Now I couldn’t find much concrete information on how much doing carpools saves you. I did find this ONE article from CNET, which says you get to split the cost of your ride with someone else. 

But I just don’t believe it, honestly. Call me a skeptic if you will. 

Now, I’m going to make a suggestion that you’ll roll your eyes at. Personally, I wouldn’t do this unless it made my life more convenient. 

And that’s using public transportation. 

My wife and I ride MARTA when we have to go to the airport or we need to go into the heart of downtown Atlanta. 

Honestly, it just saves so much time and money because we don’t have to sit in traffic, pay for parking, or spend money on gas. 

With just parking alone, we probably save $30. 

She was in law school in downtown Atlanta and rode Marta to school every day. This saved us about $1,000 each semester in gas and parking alone. 

Now, let’s see what saving this much money each month and putting it towards your retirement allows you to retire with. 

If we invest $50 that we save from cutting our Uber bill in half into our Roth IRA, that ends up being $600 per year that we invest. 

According to the NerdWallet calculator, this would leave us with a balance of $79,600k at retirement. Just by cutting out half of our Uber bill. 

The third way to stop wasting so much money is to cancel subscriptions that you don’t even use.

Cancel subscriptions you don’t use

The average cable bill is $217.42

The average gym costs $58 per month. And 63% of gym members don’t use their gym membership even once

Spotify is $10 per month. Netflix is up to $16 per month. Hulu is $12 a month. And Disney+ is $7 a month. Just pick one already, geez.

 Alright, you get the point. You’re wasting money on subscriptions. 

But it’s not REALLY realistic that you just cut out everything. 

But if you’re not using it… Dude, come on. 

Quit being lazy and just call the company to cancel your subscription. 

This is where monthly subscriptions get you. 

I’m the bullseye for a company that charges a monthly subscription.

I can’t remember ANYTHING. So, the likelihood that I’m going to actually remember the $10 charge that a random company is charging me is very low. 

And if you add up 4-5 subscriptions that you’re looking at hundreds or thousands of dollars in bills over the course of a year. 

If you can cut out all of the subscriptions that you are not regularly using, then you can save a big chunk of money. 

Now, we all have different monthly bills that we pay, so this is going to just give you an idea of what cutting out some recurring bills can save you. 

The list of services I mentioned add up to $321. I’m going to assume you’re keeping at least one streaming service no matter what. 

If I take out Netflix (you’re welcome), that leaves us with $305 per month in savings. 

And you might be wondering, “But Shawn, what would those savings invested into a retirement account look like!?”

I got you.

If we invest $305 that we save from cutting our subscription services into our Roth IRA, that ends up being $3,660 per year that we invest. 

According to the NerdWallet calculator, this would leave us with a balance of $486,000 at retirement. Just by cutting out our subscription services. 

Up next, our 4th money waster is making impulse purchases.

Don’t Make Impulse Purchases

I don’t think I need to whip out any studies to prove that we all make impulse purchases. 

Just hop on Amazon and tell me how often you don’t actually end up buying something. They just make it SOO easy to buy stuff. 

And I feel like every time I do buy something, I act like I only get to shop at Amazon once a month. 

I’m like, “Oh, while I’m here, I need to go buy that other thing I was planning on buying.”

I think I’ve bought 20 books that I’ve not even read because I’m not too bright. 

But they say that the first step to making a change is self awareness. 

I’m fully aware that I make impulse purchases. Even purchases that FEEL well thought out tend to be impulse purchases. 

For example, I wanted this camera for like 2 months. I didn’t NEED the camera to create good videos. 

But I saw that someone else i look up to uses this camera, so I’m like, “Oh crap, I really need that.” 

And over the course of two months, I slowly talked myself into why I really need it. 

To me, it’s still an impulse purchase. 

But impulse purchases normally come in the form of seeing something and immediately buying it.

To combat this, it’s a good idea to add time in between seeing the thing you all of a sudden can’t live without and buying it. 

The secret sauce here is waiting up to 72 hours before buying the item that’s catching your eye. 

If you’re like me, in the moment you think you REALLY need that item, but after I shut down the Amazon app, I honestly forget about it. 

This little hack known as terrible memory has saved me thousands. 

And if you REALLY want the item, this 72 hour window gives you time to cool down and find the item for cheaper somewhere else so you save money. 

Like the reckless animals that we are, we spend an average of $5,400 per year on impulse purchases.

Slacker Shawn: Let me guess – you’re going to tell us how much we would have at retirement if we invested that money…

Wow, just over here trying to help my friends out and you’re being dusty. 

If we invested $5,400 into a Roth IRA, we would have $717,000 at retirement. 

Guys, we made it to the end. This is the 5th way you’re wasting your money. And that is not paying off your credit card. 

Pay off your credit card each month

The average American credit card debt is $6,194

And the average credit card debt is 19%.

So, the average american is spending $1,176.86 per year in credit card interest. 

Slacker Shawn: But I hold that balance because I get $33 cash back per year.

Does math not compute to you?

Please, if you are holding this much credit card debt, just stop going out to eat with friends and making purchases outside of your essentials for like 3 months. 

I know it’s going to suck. I know it won’t be fun. But we’re on this financial journey to make our lives better. 

Apply these savings to paying down your credit card debt. Once you have it paid off, really, good job. You’re way ahead of literally everyone around you. 

But this is just the beginning. Not spending as much money in these three months is going to help you build habits of spending less and saving money. 

Keep these habits up. If you still want to go out with friends, do cheaper things like eating at each other’s houses to save money on eating out. 

Heck, you can even buy a 6 pack of beer and down it in the parking lot of the bar before you go in so that you don’t have to buy $8 beers all night. 

That tip was free. You’re welcome. Don’t ever tell me being broke in college didn’t teach me anything. That’s one of my money saving tips for college students.

So, if you save $1,176 a year and apply that to your Roth IRA, you’ll have $156,000 at retirement. 

Over To You

So, what happens if you stopped wasting ALL of this money that we have touched on today and you invested that into your Roth IRA?

Slacker Shawn: That doesn’t even make sense because the maximum contribution for your Roth IRA is $6,000 per year. 

Alright, troll. Let’s just assume a general investment. It can be stocks, 401k, or Roth IRA. The principle is the same here. 

We had the following savings:

  • Food – $2,640
  • Uber or Lyft – $600
  • Subscriptions – $3,660
  • Impulse Purchases – $5,400
  • Credit Card Interest – $1,176

If you add all of this up, it comes out to be $13,476 in savings each year that we are going to invest. 

If you are 30 years old and invest this much money into your retirement account until the age of 65 with a 6% Return on Investment, you’ll end up having $1.6M when you retire. 

But for those of you who think it’s too hard not to stop wasting all of that money, let’s say you actually do put some effort into your finances and you only save half of this amount. 

That means you’re saving $6,738 each year and that leaves you with $799,000 at retirement. 

So, please at least do something meaningful for your future.

If you made it this far, you’re a beautiful person. 

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