Contrary to popular belief, the largest chunk of American income is not spent on coffee, electronics or food. According to a recent study, the biggest income spender is housing. According to the Labor Bureau of Statistics, most Americans Spend up to 37% of their income on housing alone, with others spending much more. The standard measure should not be more than 30 percent of one's pre-tax income. In order to save more, the study suggests that a move to a cheaper and smaller apartment could enable you to make huge savings within a shorter period of time.This can then enable you to move into your own home instead of renting.

Cutting back

A good example of how much you can save by living in a smaller apartment comes from Grant Sabatier, who is in his 30's. A self-made millionaire and the owner of "Millenial Money," a financial blog, Sabatier was able to save $25,000 in two years by moving into a smaller apartment. In addition, the apartment was close to his place of work, and he also chose to eat out less. This is the money he banked and how he came up with $25,000 within two years. Since this investment was done between 2011 and 2012, it is now worth around $100,000 at current rates.

Now imagine if you did a 20-year saving investment similar to Sabatier's.

Sabatier is one of the few Americans that have managed to hit their savings goal before the age of 40. The lesson learned is that instead of cutting back on coffee, gas or food, you should take a hard look at your housing expenses. The saving made here can then be channeled into your retirement account.

Ideal housing

Moving into a house that does not use up more than 25 percent of your income is a wise choice.

Where it almost impossible to find affordable housing, like New York and the North East, other options are always available, like having multiple housemates or opting for a longer commute to work.

Housing expenses should not also necessarily be in tandem with your income.Take the example of Warren Buffet, who is a billionaire investor, and lives in a modest house which accounts for 0.001 percent of his total worth.

For a more comfortable future, finance experts advice it would be wise to make a few housing sacrifices now, as nobody would want to be a tenant for the rest of their lives. The savings made can then be translated into your own home, and this can be achieved in a few years if, for example, you are able to save around 10 percent of your income annually, to realize this goal.

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