Live below your means.
By now, you have your budget finished. You know exactly how much to you need to save to reach your goals. But the true ticket to financial freedom is to spend less than you bring in each month.
Once you learn to do that, you can kiss debt goodbye. If you have already gotten into debt, you can start paying it off. You can start putting money aside for emergencies. You can start saving for your future.
This may be a struggle in the beginning, especially if you and your family have been used to freely spending. But it will be worth it in the end when you can truly say you are financially free.
How do you get there? Here are some simple steps:
1. Get out that budget you created and take a good look at where you spend your money. You are looking for things that you can eliminate. I used to stop a Starbucks almost every day for coffee. At almost $6 a cup every day, that was $180 dollars a month...for coffee. $2160 a year....just on coffee! Just by stopping this one habit, I saved over $2000.
My husband and I ate out several nights a week. When you consider even fast food meals can now run $10 or more, that was another expense that added up substantially.
300 channels of cable TV that we never watched.
These are some examples of expenses that we were able to stop and in the process save several thousand dollars each year.
What unnecessary expenses can you eliminate from your budget? Get out that budget axe and chop out everything you can reasonably eliminate!
2. Once you've cut every possible unnecessary expense you can, it's time to look for ways to spend less on what's left. We switched phone carriers to get a better cell phone plan. The minor changes in coverage were offset by the $200 monthly savings.
We used to buy a lot of prepackaged foods like salads and precut veggies. Buying them whole and cutting them myself saved us money and the vegetables were fresher. Same with meat. Instead of purchasing already diced chicken or shredded pork, I bought chicken breast or pork roast and cut it myself. These may seem like little things, but every little cut adds up. Add that to what you saved in step 1 and you can put aside a few thousand dollars every year.
3. Increase your income. Once you've cut as much of your spending as possible, look for ways to increase your income. If 2020 taught us anything, it's the need for multiple streams of income. If you are one of the millions who lost your job during this pandemic, imagine how much less stressed you would be if you still had some money coming in from other sources. No matter what your business or job is, there are ways to bring in additional income that do not interfere with what you are currently doing. If you are looking for ways to add some additional income streams to your business and need some guidance, email me at melodieanw@smartaboutstuff.com.
Learning to live below your means can be challenging. Or it can be fun! I love looking for ways to eliminate more spending from my budget. It's like a game and every time I win, I make money! It's a matter of attitude. If you look at it as sacrifice and deprivation, it will be hard. But if you look at as a path to financial independence, you'll be amazed at how enticing your future will look.
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