This savings strategy allowed me to retire at 33

If you’ve been searching for the ultimate secret to saving more money, you actually may have known it all along…

The idea is simple: spend less than you make. And while simple, the concept can be very powerful — especially for people who don’t make a ton of money.

If you can learn to live on less than whatever you make — and then continue to take that strategy a step further, and a step further, and a step further — it will open up more opportunities than you ever imagined.

The secret to early retirement

Take Justin McCurry, for example. He’s a 35-year-old former engineer who traded in his career for retirement at age 33. He’s also married with kids.

“We weren’t extraordinarily wealthy or lucky in terms of income or jobs,” explains McCurry, who writes about his experience and what he’s learned on his blog RoofOfGood.

McCurry and his wife, also a recent retiree, saved half their income and made a conscious effort to resist lifestyle inflation. The couple’s combined income never topped more than $150,000, but they were able to put away about $1.4 million.

So how did they do it? They learned to live on less.

First, they saved on three of life’s biggest expenses: housing, transportation and food. The couple still lives in the same house they bought more than 10 years ago, haven’t bought a new car since college and they eat at home.

They also invested the money they saved.

“While working, we consistently pumped our savings into 401k’s, IRA’s, HSA’s, 529’s, and regular brokerage accounts,” says McCurry. “These investments grew enormously over roughly ten years and made us financially independent today.”

Once you learn to live on less, you start to develop long-term spending and saving habits that allow you to save even more.

“‘Save money on everything’ is a reflex, and keeping expenses low comes automatically for us,” McCurry says.

How to get started

Whether you want to retire early or just save more for the near or distant future, the ultimate goal of saving money is essentially about one thing: financial independence. And when you really start to save, you begin to understand what that really means — and what it’s like to have control over your own life and your own decisions.

So how do you get there? For super savers like Justin McCurry, the answer is pretty straightforward: save as much of your income as you possibly can and invest it wisely.

Even at a more basic level — for people who just want to save more money — the concept is still the same: live on less than you make.

The hard part is figuring out how to implement these strategies in your own life and then adjusting your habits to make it all work. Cutting costs may seem impossible at first, but as you start to see your expenses go down and your savings go up, it gets a lot easier.

Tips to get a grasp on your money and save more

If you want to save more, you have to figure out what you’re spending on, where you can cut costs and then implement a savings strategy that works for you!

Here are some tips to get you started:

• Make a budget: First you have to figure out where your money is going and if there are ways to reduce your monthly expenses.
  • Set a goal: Why do you want to save more? To retire early? To buy a home? To travel? By setting a goal — or goals — you give yourself a reason to keep your budget on track.
  • Go through your monthly expenses line by line: Start with the last three to six months and go through every expense and every transaction. Figure out what the necessities are (food, housing, transportation) and see if there are ways to reduce what you’re spending. Next, take a look at your other monthly bills (cable, cell phone, other subscriptions) and look into cheaper options. Then look at your other areas of spending and figure out where you can cut back (eating out, shopping etc.) Here are some ways to reduce your expenses and bills:
    • 7 ways to cut monthly bills
    • This free service negotiates your current bills for you
    • Cut your monthly pay TV bill in half
    • 19 ways to cut monthly expenses
    • Cut your cell phone bill by 60% to 75%
  • Set your budget by category: Once you eliminate any unnecessary spending, you can set a budget based on how much you should be spending on each area of life. And don’t forget to leave yourself some extra spending money — not a ton, but enough so that you don’t feel deprived.
• Give every dollar a purpose: The easiest way to keep your budget on track is by automating your spending and saving — if you give every dollar you earn a purpose, that will help you eliminate wasteful spending.
  • Keep it separate: One way to keep each part of the budget on track is to keep the money separate. If you set up different accounts for different purposes, you can then have your paycheck directly deposit specific amounts into each account to cover those expenses. For example, once you figure out how much you need each month for recurring expenses, send enough money to cover those bills to one account. And then do the same for each part of your budget.

Here’s more on how to get your budget sorted out and how to give every dollar a purpose. 

• Automate your savings: You may have heard the phrase, pay yourself first — because it’s the easiest way to make sure you don’t end up spending what you planned to save.
  • Use an app or service that does it for you: Technology and smartphones have made the process of saving money so much easier, and you should take advantage of it! Using an app to automate your savings and track your expenses will take the guesswork out of the process. Here are some options to look into and see which one works for you:
    • Ways to automate your savings
    • Digit tracks your spending and automates your savings
    • Mint and YouNeedABudget can help keep your budget on track

• Where to put your savings: Once you find the money to save, it’s important to put it in the right place — depending on your savings goals.
  • How to build an emergency savings fund (and why you need it!)
  • How to invest your first $1,000 to $5,000 wisely
  • Types of savings accounts: 12 options to save money

Do you have a savings strategy that’s worked for you? Tell us about it on Facebook or Twitter!