12.22.2013

The $1,000 Challenge

There are only two ways to improve your financial situation.  You can bring in more money or you can stop spending as much money.  In my quest to do the latter, I read The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheeseby Brian J. O'Connor.

Mr. O'Connor is a personal finance columnist at the Detroit News.  The book follows his quest to cut his monthly budget by $1,000 ($100 in each of ten categories). The prose is easy to read and humorous and the tips are broken up into three categories in each chapter, depending on where your personal financial situation is.

None of the recommendations are life-changing or that new to those of use familiar with Mr. Money Mustache or Early Retirement Extreme, but the book helps you with how to think about your budget and figure out where you can cut.

If you can cut $1,000/month from your budget, you can reduce the nest egg required to retire (or reach financial independence) by $300,000.  This is based on a 4% safe withdrawal rate and the amount of money required to support $1,000/month.  (1000 x 12 x 25 = 300000)

Check the book out from Amazon or your local library and let me know what you think.

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