3 expenses to reduce to get out of debt and start saving

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  • In the Netflix documentary “Get Smart With Money,” Pete Adeney teaches a couple how to save up to $8,000 a month.
  • First, they cut their Amazon shopping and grocery budget to save $2,000 per month.
  • Then they downsize and move into a new house, while renting out their first home for extra income.

Netflix’s new documentary “Get Smart With Money” features a group of “mentees” who each receive a year of financial coaching from one of four renowned financial experts.

Kim and John, a high-income Colorado couple, enlisted the help of super-saver Pete Adeney, aka Mr. Money Moustache, who retired at 31.

John is a stay-at-home dad, while Kim is a psychotherapist and female empowerment coach who earns $300,000 a year. Before meeting Adeney, their monthly expenses were $13,000. “Every time we make more money, we spend more money,” Kim said. “I want to go to the other end of the spectrum and learn how to save, but we definitely need someone to help us.”

The couple wanted to save more money and learn how to invest so they could eventually retire early. At the end of their year working with Adeney, the couple managed to start saving $8,000 a month toward their retirement goal, which they invest primarily in index funds and stocks.

Here are three budget cuts that helped them do just that.

1. Shopping on Amazon

Adeney helped Kim and John realize that they needed 25 times their annual expenses saved in their investment accounts before they could safely leave their jobs and retire early. “It’s not really your income that matters. It’s your spending choices,” Adeney said in the documentary.

Kim and John gave Adeney a detailed account of their spending, which showed the couple spent $2,000 a month shopping on Amazon. Kim admitted she buys clothes and toys for the kids to “reward herself” after a long day at work, but she’s ready to quit the habit.

“I’ve definitely changed the way I think about Amazon and spending in general because we have a really solid goal we’re working towards. Being able to retire in the next five, six, seven years is a bigger reward than anything. I could buy,” Kim says. After three months, the couple have spent an average of just $168 on Amazon purchases.

2. Grocery

Before working with Adeney, Kim and John spent $1,200 a month on groceries. “It’s like a banquet-level expense for a small family,” Adeney told them. “It’s like you’re feeding royalty.”

Adeney showed them how to start buying in bulk to save money on each meal per serving. After the first three months, the couple was only able to reduce their food expenses to $1,000 per month.

Adeney said he wanted to push the couple to save more on groceries, but ultimately he was confident their spending habits would improve over time with their new mindset.

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3. Housing

Kim and John lived in a big house in Colorado, where they paid $36,000 a year on their mortgage. After nine months of trying to be as frugal as possible, they decided to downsize their home because it was their biggest expense.

John said: “It feels like we’ve done a lot of simple things, like less Amazon spending, more mindful shopping. So we decided to downsize and sell our house here in Colorado.” They plan to rent out their home in Colorado and will use the proceeds to pay off the mortgage on their new, smaller home.

Finally, Adeney said in the documentary, “The ultimate goal of money is to not have to think about money. If your spending is low, all other problems evaporate.”

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