Transcription
Last year, I spent just $20,045, even though I live in one of the most expensive cities in the world. That's less than $55 per day, which is why I'm on track to retire before I turn 30 years old, just 8 years after starting my career. And while I might be a little bit on the extreme end of things, I'm hoping that by seeing how I live, you'll understand what it takes to retire in less than a decade. So, I'll show you what I spend on all of my biggest expenses from transportation to food and what I do with all of the money that I save.
But let me start with how I save the most money. I went to a college in a town of just 35,000 people. But when I graduated college, I was moving to a city of millions of people. And while that was a little intimidating, moving to such a big city did give me an opportunity to do something which I had always wanted to do, which is live carfree. Because while big cities are really, really expensive, it does make it a lot easier to live without a car because cities are so condensed that everything is much closer together. And not only are things way closer in big cities, public transportation is also a lot better.
But even moving to a really big city and even moving to a city with better public transportation, I still knew I had to be very, very careful about where I chose to live if I truly wanted to go completely car-free. For me, I knew there were three places that I was going to go every single week. So, if I wanted to live car-free, I knew I had to get to these places either by walking, by biking, or by using public transportation. The first thing is my office. Because my job is not 100% remote. I don't have to come in 5 days a week, but I knew this was probably going to be the place that I went to most frequently. So, I wanted to be really, really close to my office or at least have some method to get there very easily. Second up was a grocery store because I do not want to haul groceries 10 miles back to my apartment. And third was a gym. I go to the gym almost every single day, so I want to be close to a gym. And ideally, I didn't want to have to take public transport to get there because I get really, really sweaty.
So, with these three requirements in mind, I could really focus my search on just a couple of areas that I knew were going to be walking, biking, or public transportation distance to my office, a grocery store, and a gym. And luckily, I was able to find a place that meets all of those requirements. I'm a little less than 2 miles to my office, which is a little far for a walk, but it's a super easy bike ride. My commute is probably a lot shorter than most of my co-workers, even though they have cars. I'm also just a block away from a Trader Joe's, which is the grocery store I go to. I would have liked to be next to a cheaper grocery store, and there is a cheaper grocery store about 2 miles down the road, but the savings from a cheaper grocery store just weren't worth it if it meant I had to buy a car. So, I end up shopping at Trader Joe's. I'm also really close to a gym, so I can just walk here every night that I go. And what's even better is I'm also right next to a bus stop, so when I do want to go somewhere else, or if I want to go into the city and get up to a metro stop, I can just hop on the bus and be there in a couple of minutes.
So, every time I talk about living car-free, there's somebody in the comments who says that, "Well, I can't live car free because I have to drive to work or I have to drive here or I have to do that." But the reason that so many people think it's impossible to go carfree is because they didn't plan for it in advance. I didn't move here and then try to go carree. I picked the place I was going to move so that I could live carfree. It's really not as hard as a lot of people think it is if you plan beforehand. And to give you a sense of just how important this is, the average person in the US spends over $9,000 per year on transportation. And the average family spends over $17,000, but I spend almost nothing. Last year, I spent $1,17 on transportation. And 80% of that was just on plane trips. This is most people's second biggest expense, but it's completely optional.
But in choosing to live car-free, I did have to make another extremely important decision, which is where I live. And these decisions go together because how much money you spend on transportation depends on how close you live to all of the places that you go. But housing is an even more important decision because this is where most people spend the most money. And when I graduated college, I knew that I was moving to an extremely expensive place. Average rent for where my office is located is about $3500 per month. And if you really want to, you can spend a lot more money than that. Here's the apartment building that's right next to my office. And twobedroom, two-b apartments are going for over $4,000 a month. And if I really wanted to, I could have afforded to rent out one of these apartments. But I already knew before I started my career that I want to spend as little money as possible and save as much money as possible. And that wasn't going to happen if I was dropping $50,000 per year just on a place to live.
And something I've realized is that people sometimes assume that just because everyone else does something, that's the only option. But that's often not the case. Because, for example, even though the average rent for this area was over $3,000 per month, I was pretty sure that's because most people's priorities was living in a really nice apartment and the priorities were not saving as much money as possible. So, I was pretty sure that if I really looked hard, I could find something for a lot less than that. And this is true. There are way cheaper options than that. But even so, I was having trouble finding something for less than $1,700 per month that was within walking and biking distance to all the places I wanted to go. But I was just leaving college. And in college, everybody lived with roommates. So when I graduated, I figured it made a whole lot of sense to just keep living with roommates. Now, you won't find rooms for rent on the really big apartment shopping sites like apartments.com. But I hopped over to Craigslist and all of a sudden I was finding rooms for rent for less than $1,000 per month. And compared to college, I don't even have to share a bedroom or a bathroom with somebody. So this seemed like a pretty sweet deal to me. All I have to share is a kitchen and a refrigerator, which is almost never a problem.
So let's put this into perspective. One option is to spend $4,000 per month and rent a super super nice apartment just like everyone else does. Or the other option is to rent out a nice room for $900 a month plus utilities. That's pretty much the easiest decision that I have ever made. Compared to just the average rent for the area I live, I'm saving over $20,000 per year. This makes an absolutely massive difference on how fast I'll be able to reach financial freedom. You just can't save a lot of money if you're burning half of your income on a place to live. So, between housing and transportation, the two biggest expenses for most people, I'm only spending about $13,000 per year. That's just $35.60 per day.
But there is one more really big expense, and that is food. And I actually do spend more on food than I would like to. As I mentioned earlier, I do have to shop at a more expensive grocery store than I could just because that's the closest option. And since I live with roommates, I also share kitchen space. This usually isn't a very big deal, but it does mean that I can't always buy in bulk, and it limits how much storage I have to store food. So, it is definitely possible to spend even less than I do. But I do use a few strategies to massively reduce my spending. And it probably goes without saying that I'm not going to eat out very often. But it goes a lot deeper than that. So, for one, when I first moved out, I spent a lot of time figuring out the cheapest possible foods I could buy. Even at a more expensive grocery store, pasta and rice are so cheap. They're each about $1 per pound. And in terms of protein, I used to be a huge fan of eggs, but the price of eggs has been absolutely crazy since I started my career, so I've recently phased them out. Chicken has been a lot more consistent, still super cheap, and super high in protein. And luckily, I love chicken and rice, and it is super super easy to make. And whenever I want a snack, peanuts and raisins are my absolute go-to. I also have the superpower of not being bothered by eating the same thing every day. And not only is this a massive moneysaver, it also saves me a ton of time. I usually cook about once per week, and I make about 14 meals at a time. This takes me less than 2 hours per week, and it means I get to buy everything in bulk.
So, when I crunched the numbers for the last year, I spent just $2,256 last year. Averaged three meals a day for 365 days per year. That's just $26 per meal. Eating out, even at a cheap restaurant, costs 10 times that. And this is why I always say that food is the easiest way to save money. One, it's one of your biggest expenses. And two, it is a super flexible expense.
So, we've covered the three biggest expenses for most people, and these account for about 75% of my annual spending. But at this point, we've only spent about $41.80 per day. But a question that I sometimes get is, "What the heck do I do with all of my spare time to keep my expenses so low?" And no, I don't just sit in my room and twiddle my thumbs all day just to save money. I'm actually really, really busy. So, let me walk you through some of the things that I do. And by the way, if you want more detail, you can see a complete breakdown of all of my expenses and my income if you click on the top link in the video description.
The first thing I do is this YouTube channel, and this probably takes a lot more time than you would think. I probably spend around 10 to 15 hours per week working on new YouTube videos and writing my newsletter, which if you haven't joined, you totally should. And honestly, as time consuming as this is, I wish I could spend even more time on this. But the point is, I spent a lot of time on this channel and on related projects. And while that isn't free, at least it doesn't cost a lot. And last year, I started earning ad revenue, too, which can at least partially offset costs. Although, in reality, I'll probably put all of that money towards finally hiring an editor. So, I'll probably keep losing money. But moving on, last year I also made the questionable decision to start a master's degree on top of this YouTube channel and working full-time. This also takes a lot of time. It sort of varies, but I've been trying to take two classes at a time, and they say to at least budget about 10 hours per week per class. I probably spend a little less than that, but the point is it's a lot of time. And by the way, this master's degree is the reason that I've only been posting every two weeks to this YouTube channel and for my newsletter. Hopefully, I'll be back to posting weekly soon. And while this is a lot of time, the good news is it's not a lot of money out of my wallet. It is very, very expensive, but as long as I get good grades, my company will at least reimburse me.
And lastly, pretty much all of my extra time is usually spent at the gym. This is something that I don't talk about that often because it's a little unique to me, but after I graduated college, I decided to pick up kickboxing. This is actually a pretty big expense for me, but it's where I spend a ton of my time. It's where I've made pretty much all of my friends, and it's something I can really only do, or at least only compete in while I'm in my 20s. So, it's a big cost, but oh well, everybody makes their trade-offs, and this is one that I made. So, by filling my time with relatively lowcost activities, I don't end up spending a ton of money. Altogether, I only spent $4,788 on all of my other expenses, or just $13.11 per day.
So, all total, this is how I keep my annual expenses at just $20,45 per year, which is just $54.92 per day. And again, click the top link in the description for a more detailed breakdown. And I just want to point out something super important here. Even if I only made $15 an hour, and assuming I worked an eighthour day, that's $120. $15 an hour is just minimum wage in a lot of places, but it's still more than twice as much money as I spend in a day. You don't have to earn a super high income to save a lot of money.
But here's the thing. I do not make these YouTube videos to tell you that you should live like me, especially in the US. I know I'm sort of on the extreme end of things now. That is worth it to me because I'm trying to reach financial freedom as fast as I can. And I do hope that some of you are inspired to be super frugal, too. The same way that I was inspired when I first discovered the financial freedom movement. But it's not all or nothing. You can use the exact same principles that I talked about in this video to save a lot more money and reach your financial goals. Your options are not financial freedom by 30 or financial freedom at 70. There's a big in between. And here's the thing, you'll obviously reach financial freedom a lot faster if you earn a ton of money and are extremely frugal. But the truth is that somebody could earn much less money than I do and spend a lot more money than I do and still reach financial freedom before turning 40. And I explained how in this video right here. If you want to retire early without being extreme, watch that video.