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Like many other young women her age, the 28-year-old New Yorker JP Livingston plays with her dog, watches series on Netflix and explores her city. However, there is something that sets her apart from others: At just 28 years old, she is already retired.
JP Livingston worked in the financial industry for seven years and even managed to hold a management position in her company. But instead of spending all of her money, she saved herself a financial cushion of around two million euros. Forty percent of the money came from smart investing, but the majority of 60 percent she saved herself. The reason: Livingston wanted to fulfill her big dream, which she already had as a student – to retire early.
“I think you can do anything you want when you don’t have to go to work,” she told NewsABC.net USA. “If you feel like doing a traditional job, you can do it, but you don’t have to. I first thought of taking early retirement when I was thinking intensively about my future as a student. ”
When Livingston finished college, she got a lucrative job straight away, making $ 100,000 a year. However, she wanted to achieve her goal of financial independence and therefore decided to live frugally. She set aside 70 percent of her earnings every month. Even as her income grew year on year, she decided to keep saving and putting even more money aside.
Ever since Livingston made her dream of financial independence a reality, she’s been spending her free time working on her personal finance blog, The Money Habit, or walking her dog along the Hudson River. She and her husband have about 65,000 dollars (60,864 euros) a year to live together.
As the second most expensive city in the world, New York is known for its excessive prices. Yet, as Livingston illustrates, enjoying city life without going bankrupt is not impossible. Here are the best tips on how to save money:
1. Find out what you spend the most money on
On average, people mainly spend their money on three things: rent, car and train tickets, and food. Livingston tried to cut those expenses as much as possible so that she could ultimately save 70 percent of her income.
“You should concentrate on the things that you spend most on,” she says.
Although she could have bought an extravagant apartment with her high income, Livingston decided to share a flat with a roommate, which cost her $ 1,050 a month – a reasonable price by New York standards. “If you’ve just finished school or college, you don’t need the most luxurious accommodation anywhere,” says Livingston. “That was my biggest saving. I knew a lot of people my age were spending $ 400 to $ 600 more on rent a month than I was. That makes about 7,000 dollars (6555 euros) for the year. “
Even as her income grew, she lived modestly. She and her husband are now sharing a one-room apartment measuring just 28 square meters and paying $ 2,400 a month for it. Even though they already have several million on their side.
By keeping her most expensive expense as low as possible, Livingston can put far more aside each month than many of her colleagues.
2. Buy second hand furniture
Since many people cannot cope with the high prices in New York and move to other cities again, there is always cheap, used furniture to buy. However, this is also possible in any other city.
“Often the furniture is less than a year old because people are moving all the time,” said Livingston.
She obtains her used furniture from the Internet and often has to pay less than 50 percent of the original price. But that is exactly what makes it so easy to sell your own furniture again, even if it is no longer in good shape.
“You can get rid of bad purchases quickly,” says Livingston. “Whenever I buy something and don’t use it, I can sell it again.”
3. Take advantage of a busy city
There are more bars, restaurants and cafes in New York than a person can visit in his lifetime. This means that you can choose the cheapest locations to go out – even in your city. “There are a lot of cafes that are cheap, so you can meet friends there for something to eat or drink.”
4. Before you buy, think about how long you will have to work for it
According to Livingston, however, the most effective tip is to rethink: Be aware of how many hours you have to work for a new purchase. She took this strategy from the book “Your money or your life” by Vicki Robin and Joe Dominguez.
If you earn around 15 euros an hour and the new iPhone you want costs 700 euros, that means you would have to work more than 46 hours for it. Ask yourself if all the work is worth it to you.
Livingston also notes that it’s not just money you save – it’s money you can invest and grow too.
Skipping your daily latte macchiato also saves you not only three euros at this moment, but around 720 euros a year. If you count that for the next few years, you can save a high, four-figure amount in this way alone, which you can invest or which you can use to treat yourself to something special.
Translated by Jessica Dawid