If you want to take a bigger bite out of life but don’t think you have the budget, keep reading. We’ll show you how to control your daily living expenses so you can achieve those long-term dreams.
Do you spend your paycheck before you get it? Maybe you often think the credit union should fill its ITM’s more often because every time you go, it tells you there are insufficient funds for the withdrawal you requested!
Whatever your financial situation, you’re here reading this post about how to control your living expenses and hoping for some magic answer, right? Well, let me tell you, you hold the answer to relieving your money stress! Yes, you do!
Today I want to share with you two strategies that can help you (literally) pay yourself better. It won’t be easy. We’ll have to take a look at ourselves and be honest about some of the excuses we continue to give ourselves.
Step #1 to Control Your Living Expenses: Define Wants vs. Needs
The first step in getting your finances on track is to clearly set your expenses. That means knowing the difference between a want and a need. You might want that brand new car with the fancy features, but what you really need is a safe vehicle to drive your family. Bells and whistles not required. Your tummy and taste buds might tell you how delicious that fast food meal would be for lunch, but your budget will tell you a pre-prepared meal will taste almost as good.
Speaking of budget…
Step #2 to Control Your Living Expenses: Run the Numbers
Let’s break it down like this: that brand new car will have a price tag of $45,000. A used one might cost $25,000. Right up front, that’s a savings of $20,000! All those fancy bells and whistles are probably not worth the extra interest either. Considering the average loan rate is around 4% APR, this would mean an additional savings of about $2,500 over a 5-year loan. Now, that $20,000 savings turns into about $22,500 savings over five years. That’s $375 per month!
Now, let’s discuss that fast food lunch. The average drive-thru lunch costs $12. Eating out just three days a week is $36. A ready-made microwaveable meal costs about $3.00. Eating that three days a week would be a savings of $27 a week. That’s $1,296 for the year and $108 a month!
Just these two scenarios have saved you $29,000 over a 5-year period, $5800 a year or $483 a month. By deciding your long-term needs outweigh a temporary want, you are placing yourself in a better financial position and wisely preparing for emergencies that arise.