At 29, I would consider myself to be a full-on grown up person. And one of my big takeaways from full-fledged adulthood is that in order to get your finances right, you’ve got to change a lot of habits. Waste is the most natural thing for people like you and me to do. Frugality comes naturally to some (or so I here), but most of us are not this way. And that’s a shame, because the average adult financial life is packed with waste and missed savings opportunities. But for the average person, it simply doesn’t feel this way. You look at your finances and think, “I work hard, I don’t have any extra time, I’m not running up huge restaurant and bar tabs every night, I don’t live anywhere fancy. Why don’t I have any extra money?”
It’s because money slips between the cracks. When we get busy and stressed out, the details of our lives start to follow the paths of least resistance. That’s why it’s hard to keep up an exercise regimen when you’re stressed. It’s hard to keep in touch with your friends and family if you’re working all the time. Following a budget is the same way. If you’re running in the red, you are going to start spending outside the bounds of your budget, every single time.
This begs the question, “What are we working so hard for?” In many cases I have found that we have to work ourselves to death to fund our inefficient lifestyles. It’s like driving a 2005 Hummer. You’ll have to get a second mortgage to the payments you’re making at the pump. But this all begs the question, “Why not sell the Hummer and buy a car that doesn’t guzzle gas?”
Our lifestyles are a lot like this. If you have huge food costs, rent or mortgage payments that take up a third or more of your income, credit card debts, and a dozen other expenses that are dragging you down, you’ve either got to dramatically increase your earning potential or start cutting some of these expenses. This is where the miracle of frugality comes in. Many people can actually save more, while working less, simply by changing the way they live.
Start with the big stuff. Can’t afford your car? Sell it. Can’t afford to live where you do? Move. Those are the biggest and the most potentially painful changes you’ll have to make. From there it gets easier. Cancel entertainment subscriptions your can’t afford or don’t use. Use your extra income from the above savings to get rid of expensive debt. Start cooking at home rather than paying 3-4X as much for restaurant foods. Make any of a dozen different changes, if only for a month to see what a difference it makes.
At the end of the month, take a deep breath. Do you feel the change in your anxiety and restfulness? That’s because living beneath your means is easy. It’s not a constant grind. It allows you time to focus on stuff that matters: your family, your health, your other interests. It’ll also enable you to save and invest to a degree never before possible. Open an IRA, buy your house if you can, start doing some CFD Trading.
In the end, you’ll be happier and healthier, not to mention richer, than you were when you were working yourself to death for an unsustainable lifestyle. Living beneath your means is nice. It might take you a year or two to really figure out how to do it best, but believe me, it’s worth it.