28-year-old who’s banked $250,000: If you want to save big, only 3 expenses matter

One Minneapolis-based millennial, who goes by the pseudonym Sean, has already managed to bank $250,000. The 28-year-old is on pace to retire comfortably by age 37.

He saves a good chunk of his $80,000 salary — more than 60 percent — which he says is doable if you focus on three expenses: housing, transportation and food. After all, as he points out on his blog, the average American spends 70 percent of their annual budget on these three expenses.

“If you can limit those expenses, that’s where your big time savings will come,” he tells CNBC Make It.

Here’s a closer look at how he’s cut back on “the big three” and how you can too:


“Conventional wisdom complains that this cost is mostly out of our control and we should instead surrender to the market forces of wherever we happen to live,” Sean writes on his blog, My Money Wizard. But you have options.

He saves big on housing by splitting rent, and now a mortgage, with his girlfriend. Up until last year, they paid $640 a month for their apartment. After buying a home in 2017, they now split a mortgage payment and each pay about $740 a month. If you don’t live with a partner, sharing with roommates or family can lower housing costs.

When shopping for a place, make sure you’re not getting more than what you need: “If you’re renting, ask yourself whether stainless steel appliances will actually improve your life in any meaningful way,” he adds. “If you’re buying, take a long hard look at how much space you really need, and whether a mega huge yard with its mega huge maintenance is really something you want in your life.”

Keep in mind that just because a mortgage lender or online calculator tells you how much home you can “afford” doesn’t mean you have to spend that much. The online calculator Sean used said he could afford a $480,000 house, but he and his girlfriend bought one for $180,000. “That’s another couple hundred dollars every single month that I can pocket for my savings,” he tells CNBC Make It.

Another way to save on housing, which may not be feasible for everyone, is to move to a cheaper city. That’s what Sean did after living in Denver, Colorado, for two years: “Denver’s out-of-control home prices were certainly something I considered when I decided to pack up shop and head north to Minneapolis.”


Transportation costs can also add up: The average monthly loan payment for a new vehicle hit an all-time high of $523 in 2018.

The good news is, “vehicle spending is far and away the easiest category to control,” writes Sean. He drove a 13-year-old pickup truck before upgrading to a Mazda 3, which he bought for $13,000 in cash — that means he doesn’t make any car payments. “Taking a reasonable approach towards the new car upgrade is key.”

You can also save on gas by carpooling with co-workers or neighbors. And if you live in an area where public transportation is an option, consider using it at least a few days a week. While you may not save time, chances are you’ll save money.

Finally, if you live within a few miles of your office, consider investing in a commuter bike, which could easily pay for itself in less than one month. Trent Hamm, author of “The Simple Dollar,” estimates that you could save nearly $6,000 a year by leaving your car in the garage and riding to work. Plus, your commute would double as a workout.


It’s easier than ever to have food delivered straight to your door, and Americans are taking advantage of that opportunity. But what you save in convenience, you lose in cash: The typical American spends a whopping $70,000 on just takeout and delivery in their lifetime.

“I struggle with this one myself,” admits Sean, who has a soft spot for dining out. “Restaurant spending is the obvious killer here. A couple of fancy dinners with a habit of lunches out can wreak havoc on a food budget.” He doesn’t completely deprive himself of dining out — after all, it’s something he enjoys spending money on — but he keeps a watchful eye on just how much he’s spending at restaurants each month.

In short, if you want to save on food, spend more time in your kitchen. Read up on ways to save at the grocery store and check out meal prep tricks that will save you time and money.

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