10 Big Sacrifices You Have To Make To Save $500,000
Written by
Martin Dasko
Edited by
Maria Concepcion
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Have you ever wondered what sacrifices you would have to make if you wanted to save a decent chunk of change? This CNBC story looked at sacrifices made by “super savers” to reach a high net worth. The report from the Principal Financial Group was based on a survey of 1,700 individuals aged 20 to 54 who were super savers based on the fact that they made high contributions to their retirement plans with the firm. We will examine their big sacrifices so that you have inspiration for where to start.
What are ten big sacrifices you must make to save $500,000? We’ve listed the sacrifices from the most common to the least common.
1. Drive Older Vehicles
With 48% of super savers admitting to driving an older vehicle, it’s no secret that many rich people prefer to save on transportation costs. While it’s tempting to treat yourself to a new set of wheels, you don’t want to stress about making your car payments when you could be allocating these funds to your retirement account.
2. Own a Modest Home
If you buy more homes than you can afford, you will be stuck with a higher mortgage loan, meaning you spend more on interest. If you aim to build up your net worth and retirement accounts, you’ll want to find ways to save money on housing since this is often the largest expense for most people. Living in a smaller home with a lower monthly payment would help you set aside more money for the future.
3. Don’t Travel Too Frequently
In the report, 39% of the savers admitted limiting their travel to focus on saving money. If you want to travel more in your golden years, you could sacrifice the money you spend on trips right now to have more flexibility in the future.
4. Don’t Hire a Housecleaner
If you want to save money for retirement, you may want to get used to performing your duties around the house instead of outsourcing them. You could save money by not hiring a housecleaner since this would be one less expense that diverts your money from investing for the future.
5. Completing DIY Projects Instead of Hiring Out Help
Similarly, super savers are traditionally known for embracing DIY projects around the house instead of hiring help for everything. With the amount of tutorials available for free on YouTube, you could challenge yourself to save money by completing your projects.
6. Accepting High Levels of Stress From Work
Many savers have accepted that to save a respectable amount of money, they must focus on increasing how much they bring in. Sometimes, when you bring in more money, you have to accept a higher stress level from the job.
7. Shopping For Secondhand Goods
You can’t always purchase brand-new items if you’re trying to save up money. There will be occasions when you’ll want to look into used clothing or vehicles to help you with your savings. While you may sacrifice the freshness of purchasing something new, you can still find quality secondhand goods that do the same job.
8. Working More Over Maintaining a Social Life
When you’re trying to save money, there will be times when you have to focus more on working than socializing. This could require you to pick up extra shifts at work, take on bigger projects, or even get a second source of income. You may also have to turn down friend requests to socialize due to the expenses or because you already went over your monthly entertainment budget.
9. Working More Over Family Time
As important as quality family time is, when building wealth, you may have to focus more on work sometimes. This was near the bottom of the list because you can sacrifice in other areas first. However, some scenarios force you to pick up an extra shirt or family. You’ll have to decide on this sacrifice in the moment.
10. Turning Down Common Expenses With Family and Friends
You can’t say yes to everything to save significant money. Sometimes, you have to turn down common expenses like an evening out or attending an event you didn’t budget for. While this sacrifice could make you uncomfortable, remember you’re doing this for a better future.
Closing Thoughts
You may want to consider making some of these ten big sacrifices if you want to save $500,000. The good news is that you don’t have to make all these sacrifices to build up your net worth. For example, you could focus on driving an older vehicle or living in a modest home while allocating more funds for travel. You could also limit how long you make these sacrifices so you don’t burn out. The goal is to give up a little today to have more options in the future.
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