How to make £50,000 through Self-Reliance.

2016 is the year of self-reliance, in which I'll explore how little I need to be happy.

So far I've dropped a few minor habits, like drinking and dining out, and I've tried to be stricter about careless spending.

Estimated monthly savings so far:

• No coffee out: £22
• Taking lunch to work: £52
• No Alcohol: £50
• Cycling rather than bussing: £90
• Cutting my own hair: £5
• Not dining out: £50

If factor in the alternative costs, like bike parts, tea, groceries, then the savings are around £215 a month. Invested in index funds at a 5% return for 10 years would yield £33,385!

I would need savings of £74,000 to generate enough income to pay for these habits (at a 3.5% return) in retirement. Instead I'll be earning a bonus £100 a month from my savings - that's one ivory backscratcher a year!

Let's see if we can do better though. 

Instead of buying clothes new, there are perfectly nice clothes in charity shops. Estimated savings: £15 a month.

Doing my own bike repairs (especially gear tuning and wheel truing). Estimated savings: £15 a month.

Using the heat an hour less in the winter. Estimated savings: £5 a month.

That brings my estimated savings to £250 a month. 

Still, not good enough.

• A few minor alterations to my grocery purchases: £20 a month.
• Being stricter about using re-useable nappies for my daughter: £20 a month.
• Using the library exclusively for books: £10 a month.

There, that's £300 a month, which, invested at 5% return will yield £50,000 in 10 years. Or £123,000 in 20 years which would produce £360 in passive income (at a 3.5% return).

So, by being a little more self-reliant, by taking a few extra minutes a day to do something for myself, by making an effort to learn a few simple skills, I'll be earning enough to cover my family's grocery bill every month in retirement.

(*For anyone who thinks this doesn't sound like 'fun': here's a great post from Mr.Money Mustache )