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3 Cut spending to get out of debt and start saving

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  • In the Netflix documentary Get Smart With Money, Pete Adeney shows a couple how to save up to $8,000 a month.
  • First, they slashed their Amazon shopping and grocery budget to save $2,000 a month.
  • Next, they downsize and move to a new home while renting out their first home for extra income.

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

High-earning Colorado couple Kim and John sought the help of super saver Pete Adeney, aka Mr. Money Mustache, who retired at the age of 31.

John is a stay-at-home father while Kim is a psychotherapist and women’s coach making $300,000 a year. Before they met Adeney, her 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. By the end of their year with Adeney, the couple managed to save $8,000 a month toward their retirement goal, which they invest primarily in index funds and stocks.

Here are three budget cuts that have helped them.

1. Amazon shopping

Adeney helped Kim and John understand that they need to accumulate 25 times their annual expenses in their investment accounts before they can safely quit their jobs and retire early. “It’s not really your income that counts. It’s your spending decisions,” Adeney said in the documentary.

Kim and John gave Adeney a detailed rundown of their spending, which revealed the couple spent $2,000 a month shopping on Amazon. Kim admitted that she bought the kids’ clothes and toys to “reward” herself after a long day at work, but she was ready to break the habit.

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

2. Food

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

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

Adeney said he wanted to urge the couple to save more when they shop, but ended up feeling confident their spending habits would improve over time with their new mindset.

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3. Housing

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

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

Finally, Adeney said in the documentary, “The ultimate goal of money is not having to think about money.

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