If you have read my post on financial freedom, you may recognize the value in saving large amounts of money. If you can get your savings rate above 50%, you could retire several decades early! While it's fun to think about having enough money to take charge of your life, getting there can be much more challenging. You might look at your monthly budget -if you've made one- and think that you are doing your best. In reality, you could be saving much more. In this post I'll take you through some of my own ideas for how to save most effectively.

1. Kick the Coffee

Out of all categories of expenses, the smallest ones can sometimes have the strongest effects. For example, you may think that it's okay to spend $2 per day on a simple cup of coffee. You're wrong. $2 every day for a coffee would equate to about $60 per month, $730 per year and $7,300 over ten years. Even though that coffee barely registers a blip in your daily budget, if it becomes a habit, it becomes expensive. If you switched from purchasing a coffee to making your own at home, you could reasonably save $50 every month. This might not sound like a lot, but as you can see, it really adds up over time.

2. You Don't Need that Shirt

"J. Crew was having a great sale and I got 4 shirts for $50." If you are like the vast majority of people, you have not recently lost your entire wardrobe to some sort of natural disaster. You likely also have not gained or lost so much weight that your clothes no longer fit. Unless you fit into one of these two categories, it extremely likely that you do not need new clothes. There are limits to how many items of clothing you can even wear in a period of time, so there is really no use in adding to your already large enough collection.

It's pretty easy to accidentally slip into spending $100 per month on new clothes, usually justified by being tricked into thinking that you got a good deal because there was a huge sale. Until a couple of months ago, I thought this was reasonable too. I would routinely buy new outfits to congratulate myself on existing. But this $100 per month can become $1,200 a year and $12,000 every ten years if left unchecked. The average person can probably maintain an adequate wardrobe for $300 per year, a savings of $75 per month.