How we increase our savings rate

As most of my readers probably know there is a simple magic formula for creating wealth which is needed for the pursuit 2 freedom. We can define the magic formula as follows:

Earn more : Spend less : Invest the difference

This magic formula consists of 3 pillars. On this blog most of my posts are talking about the last pillar since the blog is focused on investing. However, I want to show my readers how we cope with the first 2 pillars and in particular with the second pillar since that is where our family is focussing on the most.

Also, I would like some discussion with my readers. I show how we try to spend less, but what are you doing to make enough funds available for investing. Do you have tips or great things that work for you?

Spend less

For everyone that wants to reach financial independence or, to a lesser degree, just wants to build wealth, it is important that your income is higher than your expenses. Actually this is important for every Household to avoid debt or worse, but with wealth building goals in mind this is of extra importance. Within our family we approach this goal in our own way. We are not trying to minimize our spending as much as what could have been possible. We try to minimize our spending as much as possible while still maintaining the way of living that we like. The result is that maybe we don’t reach 100% financial independence before our retirement date, but it will give us the flexibility to make choices because we have an additional passive income stream. Do we want another job? Do we want to work less? Or do we stay with our jobs and spend more when we are older. All these choices will be available for us and in our mind that is freedom.

But how do we approach this? In a lot of different ways. I will go into all those ways in this post under the different sub sections.


We bought our house roughly 5 years ago. For our Household it was possible to get a mortgage of 320k in Euro’s. However, we didn’t want to spend that much money on a house knowing it would be one hell of a job repaying it all. For that amount you could buy a nice 2 under 1 roof house. However, we choose for a corner house in a row. The result is that we could buy a house for 245k which results in financial room to save more towards other purposes in life.

For our house we have a mortgage that must be repayed in 30 years. 110k of our mortgage consists of an interest only mortgage. This keeps our monthly costs lower. But since we still want to repay the complete mortgage we need to invest extra money towards repaying our mortgage. Therefore we decided to repay an additional 5k a year. We need 22 years to repay the 110k. If we have big costs like the home rebuilding we did last year, then we don’t repay extra for our mortgage. This gives us financial flexibility and we like it.

We also try to save costs for power and gas bills. In the Netherlands we have initiatives where utility companies can bid on an auction of a lot of people looking for better prices. The best bid will be sent to the people who participated and you can choose to accept the bid or not. We participate every year to keep our bills as low as possible which means we switch regularly.



This is another post where people different people have completely different bills each week. We go to a supermarket that is not to expensive. In the Netherlands we choose for Jumbo. It’s not the cheapest supermarket, but they have everything you need and they are certainly not expensive.

We love a piece of good meat, but meat is also very expensive. Therefore we choose to eat a vegetarian meal at least 2 times a week. That keeps the costs lower. Money that we use to get some nice meat on other days. it’s also better for the environment which is a plus.

We buy our vegetables and meat at a local farm store. Those have better quality and the price is lower. Who wouldn’t love that!

Last we look at the special offers. If it’s something that we can keep for longer, then we buy more at once.



We can certainly save more money on transport. To be honest, we have 2 cars, 1 motorcycle and 6 bikes for the 2 of us… I know, a little decadent. The bikes are for our hobbies mainly. I love cycling on my racing bike in summer and my mountain bike in winter. So they are not really for transport. I’m not really using the motorcycle a lot at the moment. Actually, it needs some repairs before I can use it. We are also not using the second car a lot. When I fill it up I can use for at least 3 months before I need to refill the fuel tank.. So we are thinking of selling the second car. The problem is that we both work. With a child there are situations where we really love having the flexibility. The second car costs us around 1200 to 1500 Euro’s a year all in. it’s hard to make a decision…

There is also positive news on the transport front. I cycle to work almost every day. It’s 5,5 km so it’s easy to do. It’s good for health, a little bit of training and it’s cheap although the distance is not that much that we save a lot with it.

My wife has to commute 30km on a single trip to work. She uses our first car every day to get there. She is thinking of using the racing bike once a week. This combines sports, health and it’s cheap. However, coming year I don’t believe this will happen. I’ll tell you later why.

We also use the bike a lot or we walk when we go somewhere within our village. All in all, we look at transportation costs but we can also win more on this front.



There are other costs that are of importance to. We go on holiday once a year. Since our little daughter is not going to school yet we can go whenever we want, so we choose to go outside of the main season. Prices are much lower during this time. We prefer camping sites. Although we would love to go with our own tent this is not a possibility because we would need a bigger car. Therefore we rent a mobile home. It’s still quite cheap and we love it. So it’s perfect for us!


A big costs for us is daycare for our daughter. She goes there 2 days a week and this costs us over 200 Euro’s a month (it’s much more expensive but the government in the Netherlands reimburses money). However, there is not really a solution to reduce this. Our little girl goes to my parents 1 day a week and they think 1 day is enough. I can’t blame them.


Then we have or hobbies. I love cycling which is not to expensive. Yes a bike is expensive, but other than that I only pay 50 Euro’s a year for a membership with a local cycling club and I need some clothes every now and then. Besides that I love to dance which costs me 230 Euro’s a year. My wife loves running. Only costs for that is a new pair of shoes every other year. And we swim with our little girl every week. This costs us 27 Euro’s a month.

Since we have children our spending on going out is reduced a lot. But sometimes we still go. If we go, we don’t drink much. I never understand the fascination of spending a lot of money to have a headache the next day… But that’s probably just me.


I also look at subscriptions every year. I always call our cable agency and negotiate a discount. To get it I have to agree on not cancelling the subscription for a year. This saves us 65 Euro a year. I do the same with a cycle magazine I have. I just renewed it for 2 years which saved me 30 Euro a year (I know pay 40 a year).



We try to save as much money as we can. But still I believe there is more room for savings although it is hard to accomplish. But we are on the right track. It’s important to stay focussed to accomplish our goals.

Next time I will have a look at the possibilities we have to increase our income. That post won’t be as long as this one, but it still can be very interesting to have a look at this site.

I’m also very curious what you think of this topic! And how do you handle this in your own family! Do you have tips or tricks for the readers to incorporate into the daily life? Don’t hesitate to comment!

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