Cut These 11 Expenses Now If You Hope to Retire Early

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Woman putting money in piggy bank
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Many people dream of retiring early. In fact, there’s even a movement these days, called FIRE, that offers the hope of financial independence (“FI”) and the ability to retire early (“RE”) from the grind.

However, it’s important to note that in many cases, FIRE requires a great deal of planning — and sacrifice. You might need to reduce or eliminate some spending to set aside enough money to reach your FIRE goals.

Let’s take a look at some of the expenditures common to U.S. households, according to the Bureau of Labor Statistics (BLS). Then, we’ll look at ways to reduce spending so that you’re more likely to reach FIRE status.

Note: The following annual costs from the BLS are for households of all ages and many sizes, including families, single people and more than two people living together. They reflect spending levels in 2022, the latest calendar year for which this data is available.

1. Shelter

An older black couple looks at a laptop computer screen while sitting on the sofa in their living room
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The average spent on shelter by U.S. households: $14,507

Want to reduce your housing costs? Consider getting a roommate or downsizing. You could even move in with relatives for a time.

However, if you prefer to maintain your own home, you can turn it into a moneymaker. Rent out a room through a vacation rental website like Airbnb or VRBO (Vacation Rentals By Owner), rent out your whole home when you’re not there, or explore the other options we detail in “9 Ways to Earn Extra Income With Your Home.”

You’ll pay off your mortgage faster, reducing your costs and providing a place to live debt-free after you retire.

2. Groceries

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The average spent on groceries by U.S. households: $5,703

Looking to cut your food bill? While coupons can help, there are other ways to reduce what you spend each week — from buying bread at bakery outlets to learning to make your groceries last longer.

On top of that, if you want to make some extra money, there are ways to earn cash delivering groceries. A little extra, set aside from your gig, can get you to FIRE status that much faster.

3. Vehicle purchases

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The average spent on vehicle purchases by U.S. households: $4,496

If you want to avoid this cost, one way is to get your car to last a little longer. That will eliminate the need to buy something else.

If you do make a vehicle purchase, consider buying a late-model used car. Some gently used models can save you a lot of money compared with the price of a new model.

4. Eating out

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The average spent on eating out by U.S. households: $3,639

Maybe it makes sense to spend more on groceries while spending less on eating out. Cooking at home is usually a lot cheaper than getting take-out or even using meal kits. It certainly costs less than eating at a restaurant.

That doesn’t mean that you can’t go out. With a little planning, it’s possible to slash your restaurant costs, as we detail in “A Former Restaurant Critic Shares 11 Tips for Dining Out.” All your savings can be put into an account designed to help you reach FIRE goals.

5. Gas and motor oil

Man pumping gas
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The average spent on gas by U.S. households: $3,120

Keeping your car running can be costly, especially with gas prices so high right now. There are ways to save at the pump, though. Taking the time to reduce what you spend on gas can pay off in the end.

Another way to save money on gas is to use public transit if it’s available and reliable. Plus, if you’re not using your car, you can make extra money by renting it out. That can offset some of your costs and even increase the capital you end up with, helping you get to FIRE.

6. Clothing and footwear

Woman looking in the mirror while trying on new clothes
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The average spent on clothing by U.S. households: $1,945

One of the best ways to save on clothing is to shop at thrift stores or secondhand shops. For pointers from a veteran thrift store shopper, check out “11 Secrets to Finding Quality Clothing at Thrift Shops.”

There are also plenty of online sites offering gently used clothing, including brand-name and designer clothing. You can even make money off the clothes you no longer wear by selling them online using a service like ThredUP.

7. Cellphone service

Young woman with cellphone
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The average spent on cellphone service by U.S. households: $1,431

Looking to save hundreds of dollars a year on cellphone service? Consider switching carriers, joining a family plan or buying your phone outright instead of buying it on a payment plan. With a little planning and creativity, you can get the connectivity you crave for less.

For help finding cheaper service or a cheaper phone, stop by the Money Talks News Solutions Center and check out the phone and plan comparison tool.

8. Car insurance

Couple looking at computer and bill.
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The average spent on car insurance by U.S. households: $1,592

Take the time to shop around for car insurance each time your policy is up for renewal, and you could save money each month. If you don’t have time or don’t want to comparison shop, a third-party service like Everquote can do it for you and give you quotes to choose from.

Or, avoid the need for car insurance completely by using public transportation.

9. Alcoholic drinks


The average spent on alcoholic drinks by U.S. households: $583

Want to reduce your drinking bill? The best way to save is to give it up. If that’s not your style, consider buying alcohol at a warehouse club. You can get a lower price, and those savings can fuel your FIRE effort.

Not a warehouse club member? That’s not a problem for some chains, such as Sam's Club: You can buy wine, beer and spirits there without a membership.

10. Prescription drugs, over-the-counter drugs and vitamins

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The average spent on drugs and vitamins by U.S. households: $615

You can slash prescription drug costs by as much as 50% by using tips such as paying with a discounted gift card or even paying out of pocket for some medications, as we detail in “5 Ways I Slashed My Drug Costs up to 50%.”

Take the time to shop around and compare prices, too. There are free websites that make this easy, and you might be surprised at how much you can save.

11. Cleaning supplies

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The average spent on cleaning supplies by U.S. households: $170

This category includes laundry detergent, which can be expensive. You might be surprised to learn that you might not need laundry detergent at all on lightly soiled clothes. But if you do need detergent, it’s relatively easy and inexpensive to make. See “3 Easy Ways to Get Laundry Soap for Nearly Nothing.”

Other cleaning supplies are just as easy and cheap to make on your own, as we detail in “Never Buy These 7 Overpriced Cleaning Products Again.” There’s no reason to spend a lot on cleaning supplies.

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