“When you were born, you were born free. That is your privilege.” – Incubus
Like many, I’m in terrible debt. Mostly in college loans, though there are other things that are eating at my chances of financial freedom. A year ago, I said enough was enough. I was going to be free, and I would do whatever it took to pay my dues and make what I love a career.
I’m still on that road, but it’s a road of progression that I finally decided to document here, on my blog. I want to do this to encourage myself, but also to show other people it’s possible. You don’t have to be an indentured servant to your education, or to other debts you may drag behind you like a ball and chain. Freedom is real, freedom is possible… but it takes sacrifice before we earn it back.
I started with a budget.
If you’ve never done this before, open up excel and start now. Create a snapshot of where your money goes each month. You’d be amazed at what you’ll find when you do. I started with pretty basic categories that make up this equation:
$ Total Monthly Earnings $
– Rent/Utilities (for me this is combined, but if you pay these bills separately, divide them up into separate rows)
– Car Payment
– Phone Payment
– Loan Payments
– Savings Account Deposits
Money to Play With
Really take a look at what you’re spending. There are set costs like car and loan payments, and then there are those you can influence. Phone bills, gas, groceries, etc. etc.
These are some changes I made to help save money:
1) Take a look at your phone bill and your usage.
Ask yourself, is this a want or a need? For me, a smart phone has become a necessity. My job consists of a ton of e-mails I am expected to utilize on the go or respond to at the drop of a hat. However, I can look at my data usage and see what I need vs. what my plan offers. In my case, I was right where I needed to be. What about you?
If you can do without a smart phone, do it. Buy a “go phone” (this works, even when you’re in contract) and have your company switch you back to the basics. With the majority of providers, this shouldn’t affect your contract. It can, however, save you a lot of money each month.
2) Do you have cable? Do you really need cable?
Let’s face it, we are in the media generation where Netflix, Hulu, and HBO rule the world. Maybe there’s one show, like The Walking Dead, that you watch religiously every week. Is that it? There could be an amazing way around that.
Get with a friend who has cable and loves the show, too. See if they want to do a social night at their house where you all meet up and watch the show together. More fun AND you save money. Hey, don’t be a freeloader, though. Bring the snacks and drinks why don’t you?
It’s still cheaper than your TV bill. 🙂
3) Groceries? You can totally work that.
You don’t have to be Chef Ramsey to cook up a yummy meal. I am not an exceptional cook by any means, but I can manage pasta, stir fry, and baked meals for a small price. Search recipes online. Go on. Plan ahead, set yourself a weekly food budget, and bring your lunch to work. I feed my little family of two for anywhere between $6-$10 a meal. I feed myself on typically $1.50-$3.00/meal. Going out to dinner usually has you shelling out $20 or more for two. That’s a TREMENDOUS expense difference.
Cook for yourself. Learn something new, and have fun with it. Saving money doesn’t have to hurt. Throw on some music and enjoy yourself.
Believe it or not, you have some sway on this, too. Commuting with others works well, but if you’re like me, that’s not really an option. Instead, I acquired an eagle eye for gas prices. Where in your commute is gas the cheapest? Find it, and make it your fill up spot. A few cents a gallon will add up over the months.
Also, if you’re looking into a new car, keep miles per gallon in mind when calculating your cost. A more expensive car might be cheaper when you factor in the cost to drive it every week.
Take a look at what you pay for water, power, etc. Ask yourself, do you leave the lights on? What if you opened your windows instead of depending on your AC/Heat? Little things can add up to a lot.
These are just a few ideas, but you’d be amazed the difference you can make. Shave a little off a lot and suddenly you have more to play with. Use those extra $$$’s wisely.
I take an extra $40 each month and I put it toward a specific loan (while still paying the expected monthly dues on the others, of course.). Doing so has lowered my payment on it because I’ve paid off the interest and have begun to reduce the principal. Once that loan is paid off, I won’t be hoarding the money I was putting toward it. Instead, that contribution will roll on top of the next one, meaning I will pay almost double the expected amount each month.
Think about how many years of debt fall away when you start to become more aggressive in your payments.
This has been my execution so far. What about you? Do you have any tricks or methods that have helped you get where you want to be financially? Leave a comment and let us know!