It's math. And basic math isn't hard. You add and subtract and total.
If you are struggling financially or trying to be financially independent there are some things you can do today to help yourself move forward. Each day you do one thing and it adds up.
1. Mattresses. Someone called me yesterday asking about a mattress. Not everyone is going to buy a used mattress I get that and I don't want to either. However three of our four mattresses are hand me downs. Three of them came from family members guest rooms when they moved. They had barely been used. I put an egg crate topper or cool gel topper and they work great. If you are looking for a mattress and you are desperate first try a topper for under $100. If you must buy a mattress and you feel it's a need not a want then shop around. There is a great variance of prices and don't buy into the hype. There is a local place here that specializes in mattresses and furniture and you can buy a set for $200 (twin) and up. Be careful of those mattress stores that only sell mattresses, they will hard sell you. I've seen many people do this and only be disappointed.
2. Cut down on the coffee, soda, and eating out. I shouldn't have to say it but seriously ya'll WTH! If you are stopping at a gas station five days a week or going to the drive through and spending five dollars a day (and most probably spend more and go seven days a week) you are spending $150 or more on crap that is not good for you. That is $1800 a year! Go today and get a nice travel mug and fill it at home. I often use a glass jar (like a marinara jar, yes seriously).
It's not that you can never do these things but let them be a treat once or twice a month.
3. Shop your closet or house. I broke my favorite spoon rest and wanted another one. I looked at flea markets and then one day I was getting dressed and looked down on my dresser at the little dish I had. It was a spoon rest I had been using as a catch all! Viola. I didn't need it in there and had something else. It's perfect in my kitchen.
Yesterday I purchased a dress to go to party and will take it back. The cute flannel dress thing turns out to look like Ma Wilder going to a hoe down on me. I ended up in my winter uniform, a flannel top or sweater, leggings and boots. Turns out I would have been way over dressed at the party in the dress. Lesson learned again.
4. If you get a speeding ticket. It happens to everyone but you don't always have to pay it. You could take a class in person or online for about $50 if it's your first one in a while and waive the fee and keep it off your record. When I was young and had no one to help me I asked for community service. I filed papers and served candy at community centers. We do what we have to.
5. Sell your stuff. It's easier than ever. I sold text books last week to a text book store, jewelry to a jeweler, returned some stuff in my house turns out I didn't need and ended up making $176 in a day. It's easier than ever. First think about what is in your town. The resale clothing store, the auction, jewelers, text book stores. Then there is Ebay, Craigslist, Amazon, Marketplace, and so many more. If you are broke and your house if full of stuff sell it now.
6. Shop second hand. If it depreciates you don't want to invest a lot of money in it unless it really brings value to your life. I do buy new occasionally but I often buy used cars, and other items. For years my clothes came from Goodwill or resale boutiques. I don't do this as much any more but I am not opposed to it and still shop resale a few times a year. For household items I always check Habitat and Goodwill to save tons.
7. Reduce your cost of housing. If you are really strapped consider a roommate or moving to a cheaper place. Take care of your home as it appreciates. Fix it and keep it in good repair. As you move forward in life consider investing in properties where you can have a renter such as an apartment building or duplex. Or in our case we have a vacation rental on our farm. We put our savings into building so it's positive cash flow.
8. Increase your income. This may not happen overnight but we can all do this. Ask for a raise, or find a way to move up in your current job to a higher paying position Find a part time job. A side hustle. Sell your stuff and other peoples stuff. Do you have a skill or talent? Use it. Maybe you have a skill and you decided to get out of that field. If it's high paying could you do it for a year or two to get ahead and then save to do your passion project. Many people can do what they have to do to become financially free then have more time for passion projects once they are more secure. Your dream job will still be there.
9. Auto Expenses Car Payments, Insurance, Gas and Fee's. This is one area where I see a lot of waste. Can you plan your routes to reduce wasteful driving. If you live far out can you plan your shopping or errands on the same day as you have to go out for other things. I do this. We live 25 miles from everything and I plan my shopping around when I have work or other appointments.
I am seeing many people pay about double what they should be for insurance. One drive a car that you can afford and check the cost of insurance with at least three companies. I am with Allstate and happy I have heard Gieco is also reasonable. Only insure what you need. Don't do full coverage on a beater car with no loan. Buy cars for cash, then save up for the next car. Avoid interest bearing car loans if you can. If you feel you have to get the best car for the least money and pay it off quick.
10. Food Bill. The best way to cut food expenses in my opinion and the easiest is to meal plan. Plan your dinners for the week and put in any eating out so you don't over buy. If you have a dinner date for Tuesday put that on the meal plan. Then plan two or three breakfast that you rotate and plan dinners for each night with a plan to eat the leftovers for lunch the next day. Plan some easy meals for the days you have a lot to do so you don't eat out, such as sandwiches or breakfast for dinner. I have even started keeping a frozen healthy-ish pizza for times when I am to tired to cook.
11. Gift Buying and Helping Others.
Set a budget. I included helping others because I have six kids and we help sometimes it gets to be a lot. I am setting a helping budget this year and keeping a log of it. I also took out money for Christmas in cash so I don't go over. I've set budgets before but get busy & I go over. When tired I forgot to keep up with cost. Cash is easier. On birthdays I set a budget and we do a meal and cake at home or go in as a group and everyone pays. If all my kids are going then I will have them meet at a lower cost restaurant for lunch which is cheaper. Recently for an event I took my mom and four kids out, a total of six people for lunch and it as only $80 plus tip.
Think about optimizing everything in your life. Always ask "Can I do this for less?".
The basic rules for financial freedom that everyone can follow.
1. Keep your housing cost low.
2. Keep your auto cost low.
3. Watch your food budget
4. Set limits on discretionary spending (give yourself an allowance for this, you'll spend it anyway).
5. Have an emergency fund. Get started so normal emergencies like a car repair doesn't spiral your finances out of control.
6. Avoid debt. Especially on things that depreciate.
7. Save as much as you can. As you make more get to a modest middle class life style and save the rest.
8. Don't wait to save for retirement. Always take the match! Save now and don't touch it. *Also avoid high cost brokers, use places like Vanguard and Schwab for your investments.
9. Make more, live on less, save. At the point where you have enough money to live off the interest or you have money coming in from other resources like royalties or rental properties you are financially free.
Love,
C
