Money is all about prioritizing. What are you spending money on? Whatever is important to you. That is what you’ll be spending money on. It’s all about priorities. Prioritize saving.
The consumerism culture we live in is harmful, it really hurts people.
We are spending money we don’t have, to buy things we don’t need, to impress people we don’t even know.
You need to make smart choices. Think about how stressful a life is when you have no money and think about how much better your life would be with even $2,000, $5,000 in the bank.
What we do with financial independence is control. You have control. And you have a sense of peace in what you can spend. So when you have a goal you can move towards it. It’s coming back to you controlling what you can control and having some certainty and having a plan to move forward.
So you have to weigh out where you want to continue spending more on. I don’t spend much money on social events, movies, eating out or sports games and concerts but I do value good quality sports gear + clothing, and getting the highest quality foods so I spend more money on purchasing organic fruits and vegetables and don’t cut my costs in that area.
What matters to you will define what you do and don’t cut costs on.
Find ways to enjoy yourself instead of spending money on entertainment like going to the movies, restaurants, sports games.
- A date night under the stars with a home-cooked meal
- A family day at the beach
- Bike riding at the park
- Building snowmen if it snows where you live
- Hiking to a scenic location
I love spread sheets + creating a budget. I have weekly finance meetings with myself. I check where my bank balance is at + what I’ve spent money on, and identify things I could/should pull back on.
I make a column with all of my expenses with broad categories:
- phone bill
- insurance etc.
I color everything red that is a necessary expense, like rent groceries insurance
And I color everything green that is not a necessary expense just so I can kind of play around with those numbers, like
- eating out
So what I do is enter all of the necessary expenses and enter bare minimum for the fun expenses.
For eating out I’m gonna give myself $40.
And then take your income, subtract all of those expenses and figure out how much do you have left over. Maybe you have $500 a month left over after the bare minimum to have a little bit of fun and to pay your expenses.
From there I’d say okay I have $500 a month left over, I wanna give myself a little cushion for spending so I’m gonna put $300 a month into savings and transfer that into savings at the beginning of every month, if you leave it for the end I can guarantee you it’s gonna be much harder to set that aside than if you don’t even give yourself the chance, just set it aside into savings at the beginning of the month. That way you know that all your needs are accounted for and this is how much I’m gonna spend.
$40 a month on eating out, but I still have a little bit of cushion because who knows what’s gonna happen this month, maybe I’ll be invited to a cool road trip with my friends and I’ll spend a hundred dollars in one day when I meant to spend twenty! Gives you some room to error.
A few more tips I find useful:
- Creating an emergency fund.
- I don’t make purchases without fully considering the need for the item/service.
- Finding ways to save. That could be waiting for a sale on a big purchase item, using coupons, buying second hand etc.
- Reevaluate your subscriptions each month. If you don’t use it regularly, get rid of it.
- If you have an expensive car loan you can sell it and buy a cheaper car even paying cash for a cheap car can be very beneficial.
- Can you change anything about your living situation like moving into a smaller place for getting a roommate to help pay for the rent.
- From a psychological standpoint using cash instead of cards helps many people spend less and if you’re having trouble knowing how much to spend.
- Pay attention to your subscriptions like Netflix, cable, Hulu, HBO. Do you need all four of them or could you stick to just one?
- Reevaluate that gym membership. Instead you can go running outside. + There are tons of free workouts on YouTube. And depending on the area you live and you ride a bike instead of using the car.
- Waiting a while before deciding on a big purchase. Take a long time before buying an item, specifically what types of items I’m going to buy and I want to make sure that what I buy is going to last for a long time.
What seems like a small adjustment is going to make a big difference. The accumulation of a small choices does not mean that you don’t buy things that bring you joy, it doesn’t mean that you will never buy anything new again, it just means that you will be more mindful with what you purchase + more intentional with what you buy.
I know money can be a very stressful topic. And I believe that the more we educate ourselves about finance and how to navigate saving + spending will make us capable of making wise and responsible decisions regarding finances, because money affects all aspects of our lives.