Frugal Tip - Having Hair Cuts at Home Saves a Tidy Sum

haircutJun 03, 2014: When we lived in Bay Area (California), we noticed that one of our friends trimmed his hair at home. We asked him how he did it. He said that he had gone to Costco and purchased a semi-professional hair trimming kit for $20. Henceforth, he used to give himself a haircut at home once a month which saved him a tidy sum of $20 each month. This is a neat way of saving money. In a year it adds up to $20*12 = $240 per person in the household.

So we followed suit. If you do the math you will be amazed at the results. For last five years we have been saving around $240 per person in saloon fees. There are two persons in our household, so we usually save around $480 annually. That amounts to a saving of $2400 for five years. We went ahead and invested that money in index funds.

Say we earn a return of 8% annually compounded monthly for the next thirty years. From now on wards, even if do not add any more dollars to our 'haircut at home' nest egg, it will be worth a whopping $26,245 in thirty years!

But if we continue to save $480 every year and keep adding it to our current 'haircut at home' nest egg, in thirty years it will grow to a huge $85,860. Wow, that is huge! The power of compounding is really mind boggling.

Nest EggOur "Haircut At Home" Nest Egg

Not only that, it's great fun to do your own hair cuts. We spend quality time with each other and unwind by laughing together. We hope this tip helps you save money for investing in your nest egg.

Note: We used Bankrate's saving calculator for our calculations.

Image Source(s): iStockPhoto

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