Living in financial debt is like choosing to live in chains rather than freedom. At Employers Resource, we believe in financial freedom and most importantly – The American Dream.
Maybe your new year’s resolution is to pay off debt or bulk up savings? Maybe you’re planning a wedding, wishing to go back to school, expecting a new member in your family, or starting a business? Whatever it is, it’s safe to say it will probably be expensive and you will need cash flow and emergency funds.
We’ve gathered the best information out there and provided a few tips so you can reach your goals of financial freedom. Don’t worry, we’ve taken the subject far beyond sack lunches and cutting lattes. You know by now that those little changes do in fact make a difference and prevent overspending, but financial freedom is so much more than saving five or ten dollars a day. Keep reading to learn how you can come to live your dream.
1. Your Budget and Paycheck
First thing you need to do is set a budget. Daveramsey.com is a great resource for financial advice of all kinds. Download and print these free budget forms to get you started. They are easy to use and there’s even a form for those of us who have inconsistent paychecks.
As soon as you deposit your paycheck, pay your credit balance in full, then pay into savings (you should have a set amount that goes into savings with every check.) Then, withdraw any “spending” money and just carry that as cash. Cash is harder to part with, and this is where you should pay for the unnecessary things like the occasional starbucks or lunch out with a friend.
I highly recommend Dave’s old-school but tried and true envelope system.
2. The Plastic Trap
Do you have a store-branded debit card? Thinking about getting one for the rewards or discounts? First, you may want to learn more about the pros and cons of owning one.
When it comes to credit cards, have you ever considered not owning one? It is difficult to obtain a loan without credit, but a credit card is not the only way to gain a credit score, and a good one at that! Student loans, car payments, and mortgage payments all report to your credit. It’s not possible for everyone but a no-credit lifestyle is an appealing option for some. Read about how Cord Jefferson does it (even though his Mom may not approve).
Can’t escape the card? That’s ok, you can still keep things under control. Set up scheduled payments for things like rent, insurance, utilities, phones, internet or anything that is the same price each month and must always be paid. That way you know exactly how much to pay back into the card with every paycheck. Switching to online payments can also save you from the cost of things like envelopes, postage, and checks. The important thing to remember is to never let a balance sit on your credit card.
3. Question Everything
Question all expenses in your budget. Dave’s budget forms are helpful here because you can see where all of your money is going. Go down your list of bills asking yourself if you really need every one of them or determine what is unnecessary.
If a goblin pulled $10 out of your wallet every month you would probably have some questions for the little green thief, right? That’s how I look at all the little charges that are so easy to forget like Netflix, Spotify, Birchbox, or Loot crate. All of these things are fun but if you find yourself spending outside your means then these are the first things that need to go.
When purchasing big-ticket items make sure you do your homework. You can often find deals, coupons, or even many items used at a fraction of the price.
Negotiate when appropriate and consider your monthly bills. Many television, phone, and internet companies are one call away to a discounted price. Don’t have time to make the call? There’s a company called billcutterz that will do it for you! Just send them your bills and they will call your providers and negotiate for you.
4. Save Money and The Earth
Whenever possible, carry a reusable water bottle with you. Many of them include filters so you can fill up anywhere. You’ll also be doing good for the environment at the same time! Same goes for coffee mugs; fill up a thermos every morning before you leave to save yourself the money and the paper cup. Saying no to disposables like water bottles, coffee cups, and plastic or paper bags is the best way to reduce waste. See this article for more ideas.
I purchase a lot of clothes, books, and random home goods from thrift stores. Many people don’t think about the major impact brand new items have on our environment and pocketbook. Recently, I scored a Stephen King book for $2 that would have been $25 new and a beautiful coffee table for only $50. Purchasing used items makes me feel like I’m making a difference in more ways than one.
5. Bonus Tips
We all know you have to limit eating out, you probably share an appetizer or dessert whenever you do go out. This helps, but something most of us don’t consider are the drinks. For a nice little bonus savings tip I challenge you to only drink water at restaurants. Sodas and alcoholic beverage prices are marked up at restaurants. Switch to water and have these beverages as a treat later on. This will lead to a richer and healthier you.
Ladies, do you purchase high-price cosmetics from a department store? Did you know Lancome actually owns less expensive brands such as L’Oreal and they often use the exact same ingredients only the potency and packaging shoot up the price at department stores. Check out this article that directly compares both brands similar products. Spoiler alert; L’Oreal wins!
Freedom Isn’t Free
I hope you learned a thing or two or at least are inspired to try a few of these strategies. There’s not much that can beat the feeling of financial stability. Budget tips small and large all make an impact but its up to you, the spender, to implement these tips into your life. Accidents happen, but debt and financial freedom is all about the choices you make. Use these budget tips and start building a better future for yourself, your family, and your business today!