Tips for cutting costs, from the hard-core savers

At a time when many households are struggling to make ends meet, for tips on how to keep your costs down, look to the financially independent, retire early (FIRE) and financially independent (FI) communities.

The FIREs are the gurus of cost-cutting, and in their online blogs you will find an abun- dance of detailed strategies about how to live cheaply.

Here are nine key FIRE saving strategies:

1 Get out of debt. Make paying down any credit card debt a top priority.

2 Cut down on frivolous purchases, such as online clothes shopping, electronics and toys for the kids. Don’t spend your weekend browsing the shops or looking online. helps lock in higher profits when shares have moved in your favour, while also limiting losses. Smoother ride

3 If possible, live close to where you work. Walk, cycle or take public transport.

The cost of driving can add up. If you cover 20 kilometres a day, you could easily spend tens of thousands of dollars over a decade – and even more if you drive a family sedan or SUV.

4 Stop eating out and learn to cook meals from scratch. A $100 per week restaurant habit costs $52,000 every 10 years. A $12 lunch twice a week adds up to $12,480.

5 Sell any items in the house that you no longer need or want.

6 Make extra payments on your mortgage.

Dollar-cost averaging – a process of steadily drip-feeding money into shares rather than investing a large lump sum in a single trade – can also be used to manage the market’s highs and lows.

“This tends to be an underutilised strategy, but it can be very effective at smoothing out the price paid for shares over time,” says Glover.

Of course, the simplest way to manage volatility may be to do nothing at all.

“Unless you need the money, there is often no reason to sell shares just because their values take a short-term dip,” says Glover.

“If you sell, the person who is on the other side of the transaction – the buyer – is just going to convert your losses to their profits when the share price recovers.

“Remember, too, dividend payments can compensate for any short-term declines in a share’s value.”

Choosing a broking platform is also an important step.

The good news is that despite high inflation, we’re unlikely to see significant increases in broking costs this year.

Broking platform Stake recently announced a small lift in its brokerage, but this is unlikely to be the start of a broader trend.

“With the big trading platforms offering zero or very low brokerage, low costs are now entrenched in the market, and investors expect to pay minimal brokerage,” says Glover.

He believes new investors could select a broker based on the availability of free educational resources and support.

7 Cut your grocery spending. Buy whole, fresh ingredients instead of packaged meals. Stock up on basics at the cheaper supermarkets.

8 Cut back on holidays and use credit card rewards to pay for them.

9 Pick up extra jobs that fit in with normal working hours.

A big driver for FIREs is making a smaller environmental footprint: they are careful about food waste, planning their meals and using leftovers.

Food waste is estimated to cost the average family up to $3800 a year, as well as creating 300kg of waste per person, according to the Fight Food Waste Cooperative Research Centre.