Live Cheap
Creating a monthly, daily, or weekly budget is easy to create, but sticking to it is difficult. The idea behind a budget is not to run out of money before the next payday. Your budget is determined by your lifestyle, which is not a wise way to do so. Executing a budget means that you, unfortunately, need to make changes to your lifestyle. In other words, a budget that does not correspond to your current lifestyle.
The one thing that humans are generally afraid of, is change. We want to see change but do not want to go through the process of implementing it. This will ultimately allow your budget to miserably fail. Adjusting your over-budgeted lifestyle to living cheap will inevitably save you money in the long run. It won't hurt you to buy a cheaper brand of the same item that you constantly purchase. A one-dollar sacrifice invested today will yield a two-dollar return. Hence, living cheap for a while is one of the best ways to save money.
Cut Spending on Dining Out and Fast Foods
On a warm summer's night, you're extremely exhausted from work and now you have to stand in front of a warm stove to cook dinner. Your partner is probably occupied with another task, the kids are busy with their school work and, you're sweating in the kitchen. Your subconscious comes knocking on the front door of your mind to utter one word: "restaurant". Your partner drops his task, you stop the cooking and the kids put a hold on their assignments. You're now on your way to the restaurant with your family in the car, but not your budget. A little bit of weariness or laziness will overpower your willpower which, eventually, leads to spending unnecessary money.
This is a common problem among young people and young adults. Entering employment for the first time as a young person can be overwhelming when you get paid for the first time. You've got no debt, mortgage payments, and no worries. Whatever you earn is entirely yours. This is when you start making impulse purchases. Your everyday lunch from home now becomes fast food until your money is depleted. Later in your career, your salary increased along with your want to need things. Included in this is when you brainwash yourself that you're are too busy to cook. The quickest way to get fed is to head over to the restaurant against your budget.
Fast foods and dining out are relatively inexpensive. A $5 burger here and a $12 meal there won't hurt your pocket. It's the continuity of paying for it regularly that makes it expensive. Treating yourself or your family to a restaurant or fast food when you get paid is completely fine. You need to reward yourself when your salary reflects. Once or twice is algood, however, more than seven is a concern to your budget. A lack of fast food leads to faster savings.
Quit Bad Spending Habits
According to science and psychologists, it takes roughly twenty-one days to overcome a habit/addiction. This can range from an addiction to drugs, Netflix, speeding, soda, and even jealousy. We develop bad habits because we feel it is acceptable for us, and not others. Putting yourself first is one of the most amazing personality traits you can have to succeed in life. On the other hand, arrogance is more than likely to join like a thief in the night. An elevated level of arrogance will, without your awareness, reject the advice that is given to you. Sometimes, others do care about your well-being. The lack of seeking or accepting advice will, undoubtedly, lead to unnecessary spending.
Bad habits, also known as selfish habits, is not an easy task to combat. Every morning, you feel the need to buy a coffee at work or at a Starbucks instead of preparing yourself a travel flask of coffee at home. You're at a friend's house for poker night after a long week of work. Later the evening you start losing badly. Because of your selfish habit of not accepting advice and putting yourself too first, you start betting more money that is out of your budget.
Bad habits, also known as selfish habits, is not an easy task to combat. Every morning, you feel the need to buy a coffee at work or at a Starbucks instead of preparing yourself a travel flask of coffee at home. You're at a friend's house for poker night after a long week of work. Later the evening you start losing badly. Because of your selfish habit of not accepting advice and putting yourself too first, you start betting more money that is out of your budget.
Pay Off Your Debt
Whenever you hear or see the word 'debt', your heart starts racing. It is something that most of us have to deal with. When the bank, credit facility, or lawyers call you regarding your debt, it becomes a conversation that feels like it'll never end. They will offer you payment arrangements to settle your debt but sometimes it is difficult to adhere to that as well. You made debt to get you out of a tough situation or made debt for something that wasn't needed. I call this "luxury debt". Regardless, debt or too much debt will, from time to time, bring down your morale. It's not the end of the world.
Making a list of your debt and how much you owe to each one is a start. This is admitting to yourself that you are in debt, and it needs to be settled. Adhere to the payment arrangements made available to you because it will only benefit you and your health. A friend of mine settled her debt by creating multiple sources of income. Besides her monthly salary, she had about three side hustles. Within one year, she managed to become debt-free. Fun fact - she left her job because her side hustles are now earning four times more than her previous job.
Paying off your debt by creating multiple sources of income is your gateway to financial freedom.
Savings Account
When you were a child, your parents introduced you to the pink piggy coin collector. You would throw your spare change into this little piggy. As soon as it's full, you open it to count how much money you have saved for the period. A few years later the piggy becomes too small for your savings because you're now part of the labor force and earning a lot more money. A bank account comes into play.
In my opinion, if you want your savings to draw interest, having one account is not a good idea. Two bank accounts are. A good friend of mine works for a company that pays him twice a month. His allowances get paid mid-month and his salary at the end. The way he saves marveled me. He got two bank accounts - savings and current. His allowances and his salary get paid into his current account. To keep him going until the end of the month, he will make use of his allowances. However, when his salary gets paid in, he transfers the amount of his mid-month income into his savings account. He doesn't touch his savings account. This is the cycle he lives in and, if you ask me, it's quite clever.
Part of your savings can be placed in an investment account to draw more interest depending on the interest rate fluctuations. Adopting a method like my friend is very simple to set up. The commitment to not touch your savings may be the difficult part. I gave it a go, and it's working for me. Imagine, what it could do for you.
Transport
It comes as no surprise that transport costs are increasing daily. From time to time it'll decrease, but the increases are more frequent. Automobile manufacturers have developed and built means of transport that are becoming more fuel-efficient. Some of them electric. We depend on various forms of transportation so that we can move ourselves or products from point A to point B. Transport costs can be broken down into many categories. Below are the main forms of transport:
Air travel
Shipping
Road travel
Air travel and shipping are used to move cargo and passengers from one country to another country that will be impossible to accomplish by foot. Moving along, the main point of this topic in the article is, of course, is your means of transport to work. If you own a personal vehicle but rely on public transportation to work, you're on the right path. It goes without saying that you're definitely saving a couple of dollars on fuel costs. Traveling to work and back using your personal vehicle does come with its perks. You'll get home in a fraction of the time compared to making use of public transport.
Many companies provide transportation for their staff after shift. Why not make use of it? Traveling via bus or train and making use of work transport will save you a great deal of money. If you want to save money, you have to sacrifice convenience for your pocket. At one of my previous jobs, a colleague of mine spent approximately $140 per month on fuel. I spent $27 per month on my bus tickets. Here is the kicker. We lived in the same area and our company provided work transport for after shift. I got home 40 minutes after shift, and he got home 15 minutes after shift. His convenience overshadowed his will to save money.
Once you see results, it becomes an addiction!
Lights Out
Whenever I read or hear the word "lights out", it reminds me of when my parents decided that my brother and I need to go to bed now because it's school the next day. As kids, we didn't know what bills and savings meant. This is what we only learned and realized as we got older and more responsibilities were brought upon us. The advancement of technology motivates us to make our lives and homes smarter with various appliances and smart gadgets. The smarter our home, the higher our energy consumption.
An energy bill is something we'll always be faced with. Thomas Edison never thought of the high energy bills that I'm going to receive when he invented the light bulb. On average, there are about 3 televisions per household. Manufacturers are developing energy-saving TVs, but to what extent? They are still consuming energy. Light bulbs also come in energy-saving bulbs but we leave them on when it's not needed.
To save on your energy bills, switch off your lights, appliances, geyser, or boiler when you're not using them. It may be difficult to keep track of what appliance uses the most energy in your home, but, you can solve this problem by having a smart meter installed. This will be able to keep track of your energy consumption and your average consumption on a monthly or daily basis.
Turn off the lights and save money!
Self-Payment Plan
After paying all your debt and bills, the remaining balance in your bank account is for groceries, transport, water, electricity, and spending money to treat yourself. During the course of the month, you get invited to a few gatherings or parties. This comes at a cost! You need to throw fuel in your vehicle and you can't show up empty-handed at the event. These are unbudgeted costs! I call these "crippling expenses". Budgeting for an event that never existed when you got paid is impossible.
Now, your budget is off-course for the month and you need to think of a plan B to get back on track. An ex-colleague of mine had, what I think is, a brilliant and simple plan whenever he had to make crippling expenses during the month. If there were seven days left until the next payday, he would divide his remaining bank balance by six days, and not seven. The sum of his calculation is what he can, at most, spend for each day until the day before his next salary date. This was his self-payment plan to survive for the remainder of the month.
Crippling expenses are sometimes difficult to avoid. However, it can be managed well. You don't have to attend every event if you want to save money. The more you say no, the more your savings will agree.
Clothing
Most of us love fashion. If you look good, you feel good. If you feel good, you do good. It goes without saying that your dress code defines who you are. The big fashion labels include Louis Vuitton, Gucci, Chanel, Hermes, Prada, etc. These are just a few of the most expensive fashion brands in the world that are worth billions of dollars. You have to be very wealthy to wear these garments. If you're not able to afford this, but you still buy it, you're crazy!
Wearing ridiculously expensive clothing whilst living on a budget and a middle-class income is a fashion drug. Swapping out your nourishment and wellbeing for a designer shoe is ludicrous. If you want to save, cut out wearing designer garments for a cheaper option. My dad once told me: "A master chef can make a cheap dish look expensive". The same goes for fashion. You can wear cheap clothing and still make it seem like you're a millionaire.
Iconic examples of billionaires that dress as if they are broke are Bill Gates, founder of Microsoft, and Mark Zuckerberg, founder of Facebook. I once met someone that wears $30 tracksuits and drives a Ferrari. I also met someone that wears $200 tracksuits and he can't afford a car.
If you want to live a debt-free and broke-less life, start taking note of these pointers in this article. Start saving today!
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