An age old question that I hear asked time and time again is, “How can I build a budget that won’t completely interfere with my lifestyle?” Whether you’re a shopaholic, a downtown party animal, or a homebody that subscribes to everything offered on TV; you may think that budgeting your expenses may take all of the fun out of living. I’m here to tell you that saving your money doesn’t mean that you have to deprive yourself of your enjoyment — in fact, I recommend that don’t.
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What is one thing that we as people tend to do anytime we try to change something about our lives? — We tend to go overboard on the goals we initially set for ourselves, and in doing so, we set ourselves up for failure right off the bat. Many times, our ambitions start out strong, but then slowly wither away as we come across more and more triggers that our old habits have left imprinted into our minds. The truth is that we can only ignore certain triggers if we’re able to still listen to others. I am not saying that you should give yourself a cheat day; but by putting only what you are able to handle onto your plate at one time, you will be less tempted to relapse back into your old ways. Let’s look at a gym during the beginning of the new year as a prime example of how this happens to many of us: At the beginning of each year, gym membership sales skyrocket and many people are going to the gym more than normal on account of their “new year’s resolution” to lose weight. Gym’s are so aware of this trend, that they even market sign-on bonuses and special offers just to get those new members through the door. Over time though, that crowd that may have had all the right intentions starting out, always gets smaller and smaller as the year progresses. The reasoning behind this comes from when people try to change their lifestyles so drastically, that they end up biting off more than they can chew and in turn just give up on trying to lose that weight altogether. This is exactly why overshooting our goals may not only leave us feeling incompetent when we are unable to accomplish them, but they may also drive us to completely abandon our efforts.
When describing to people the best way to start living on a budget, I encourage them to start small and work their way up. Wars are not won by one big victory, but by many smaller ones over time. The same goes for our desire to save money. By taking on one issue at a time, we are much more likely to accomplish what we had set out to do. Now, a question that still remains is where to start. This is where YOUR lifestyle has to be taken into consideration. When looking at where our money goes, I also try to look at which of those expenses are DISPOSABLE. Though there are many things that contributes to our money leaving our pockets, I want to touch on these three areas specifically:
- Our credit card trends
- Our night life and going out with friends
- Our subscriptions to services that we enjoy at home
It is important that you can identify what’s within these areas of spending, and that you can properly dispose of the things that you can live without.
Are you the type of person that enjoys having the newest tech or find that you constantly spoil yourself with new clothes? If you haven’t been able to tell by now, we live in a consumer’s world. This means that businesses rely on us to spend money buying their products — and though I am a strong supporter of what these businesses set out to do, I also realize the threat it can hold to our personal finances. Businesses spend countless hours and capital to market to us as consumers. This is why ads and commercials are so artfully created and why we always become a sucker to their sweet talking.
Though spending money by itself can be dangerous; the bigger issue that we are faced with when desiring these new things, comes when we look into our wallets and realize that we don’t even have the money to buy what we want. That’s when our credit card companies show their faces. They know that most of us will likely break into our urges and that’s why they remain to be some of the strongest businesses around. If you aren’t aware, credit card companies earn their money through the interest they get from lending you money (also many times referred to as your line of credit). Depending on your credit score and the type of credit card that you are approved for, their interest can range anywhere from 11% to 22% APR. This means that a $400 Apple Watch could cost you $450 if you were to pay it off in one year. Why would you want to spend MORE money on the exact same thing if you could simply save your money and buy it in full at a later date?
This is the first thing that I’d like you to sit down and look at when creating a budget. Though I understand that credit cards can help build up our credit scores for the bigger purchases down the road, rarely are they ever used for solely that purpose. By disposing of your credit card debt (or at least limiting it to the bare minimum), you’d be surprised to see how much money you could actually save. The beauty of it is that not once did I mention that you’d have to give up your love of shopping. Instead, I suggest that you simply limit your spending and save your money to buy the nicer things, such as that Apple Watch, when you finally have the money for it. I know it may be a bummer to hear you can’t necessarily have it right away, but remember that you’d be saving your money and STILL be getting those products that you enjoy showing off.
Life of the Party
They say “The Good Times in Life Should be Shared with the Ones You Love”, and I couldn’t agree more. The misconception many of us have however, is when we think that our time spent with them has to consist of going out and hitting the bars or night clubs every weekend. I get it, sometimes you have to go where the party is, but who’s to say that you can’t still have a good time getting you and your friends together at one of your own homes and creating your own party? Though I am NOT suggesting that you create a public disturbance and get your neighbors to call the police on you (as much of a great story as that would make), I simply want to provide you with a way you can still have a great time and not have to pay that ridiculous cover charge or drink prices you’d have to pay if you went out.
With the prices businesses in the food and beverage industry have to make in order to make a profit, that leaves us as their patron to pay triple if not quadruple the price of the exact same thing we can consume at home. Take beer as a standard case in point. If you were to buy a 6 pack of beer to take home, you’d end up spending anywhere between $6 to $12 on it depending on the brand and where you bought it. That means that each of those bottles had cost you $1 to $2 to enjoy. Now if you were to go to a bar, a restaurant, or a night club; you could be paying as much as $10 dollars for that exact same beer. If you were to go to a professional sporting event? —Then not only are you paying for your tickets, but expect to pay even more on that beer just because the plastic cup it comes in may have your favorite sports team on it.
The point I am trying to make is that you don’t have to waste so much money on going out if you are able to make a night at home with your friends equally as enjoyable. Now for special occasions, I understand where it is important to make the most out of the night. I am not talking to the people who only go out to the bars once in a while and I am not talking to the sports fans that can only make a game once or twice a year. I am talking to those of us that become overindulgent when it comes to going out and doing things. I am not saying to become a homebody and never show your face in public again, but rather limit yourself to how many times you decide to make a public appearance. Remember that you can have just as much fun with your friends at one of your houses, and if your friends give you a hard time, then show them this article so that I can try to persuade them to be more money conscience as well.
Home is Where My Netflix is…
Now to take this in the complete opposite direction, always staying at home may not be financially healthy for you either. I know I sound indecisive, but if you find that you are a homebody who has accumulated over 155 channels on cable TV as well as subscriptions to Netflix and/or Hulu; you may be just as guilty of overindulging as the people who go out every weekend. The reason why you may not be paying that much attention to your expenses for theses things comes from the fact that many times you’re subscriptions get automatically withdrawn out of your bank account without you ever having to lift a finger (other than the initial set-up to that membership). This can become a huge problem for those who are looking to save money.
There is something to say about having a physical presence when dealing with the transaction of money. I know many times I go to a store for my purchases, I get a friendly reminder of how much I am about to spend when the cashier tells me my total. Even card readers now many times ask you if your total is correct. This may be a method for businesses and card companies to be able to deal with disputes later on; but as a consumer, it can also be a way for US to remember that what we are actually purchasing costs us money. This is where the automatic withdraws that we set up when joining a service like Netflix or Hulu can become our worst enemy because we lose that sense of hesitance like we may have when purchasing something in person at a store.
Not only that, but honestly, how many subscription services does one household need? This is why my wife and I said goodbye to services like cable TV years ago and instead strictly get our enjoyment from Amazon’s online streaming service. Cable, at one point, would cost us nearly $80/month — where as Amazon Prime only costs us $119/YEAR. That’s over $842 we’ve saved each year by telling the cable companies that we’re through with their ridiculous prices. What makes Amazon even sweeter of a deal is all of the things that are included in our membership. Not only do we receive the video streaming like what Netflix and Hulu ONLY have to offer; but we also get free 2-day shipping on online purchases we make, free eBooks we can borrow from their Kindle store, and a selection of music we can stream as well. I’ve even heard that Amazon owns a website called Twitch which offers free PC games for those who are Amazon Prime members. With all these extra add-ons (plus others I failed to even mention), it’s safe to say Amazon really is a great alternative for anyone looking to cut down on their monthly bills and transition themselves into better spending and savings habits. If you are interested in trying Amazon Prime for FREE, click on my affiliate link below to sign up for your free trial.
I feel these areas in which you spend your money could be some of the easiest ways to cut off that extra fat and get you off to a great start at not only planning a budget but also sticking to it. Your work shouldn’t end with simply revisiting these three areas though. If you were to apply this same mindset when looking at your other types of expenses as well, I am sure you’d notice many things that you could cut down on or even completely cut out altogether. Also, remember not to overwhelm yourself. Like I said earlier, wars are won through the small victories. If you are just starting out, give yourself only one goal to aim towards. That way you can feel great about yourself when you finally achieve it and then add onto it over time… and I mean it. DON’T FORGET TO ADD TO IT, but do it when you’ve accomplished the previous task first.
I sincerely want you to still enjoy yourself when learning to save money, and while many will tell you that this method may be the “lazy” way or that you aren’t really accomplishing anything, DO NOT LISTEN TO THEM. It is important to remember that everyone excels at a different pace. I have seen real success out of these methods and want you to see success as well. Of course, if you are really in it for a challenge, no one can hold you back on saving more aggressively other than yourself. Chase your dreams, no matter how big, but just make sure you’re smart about it.
As always thank you for you time, and I look forward to hearing about your successes down the road. Until next time…
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