Discipline. Sacrifice. These are two words that aren’t very popular nowadays. It seems that everywhere you look, all the ads are either promising something very good very quickly or very conveniently. The idea of having to wait has, well, become sort of old school nowadays. People want their stuff-whether it is a software download, a book ordered through the mail, or a date-delivered quickly.
It seems that everyone has attention deficit disorder when it comes to the good things in life. The idea of having to wait or, much worse, having to give something up so they can enjoy something seems, at best, antiquated, and, at worst, almost insulting. Modern day expectations focus on getting the best stuff now.
With all that said, the fact that you are reading this article means that you are feeling some of the sting of undisciplined spending. As you probably already know, undisciplined spending feels good when you buy that bag, big restaurant meal, or fancy clothes, but it hurts a lot when you have to pay your card’s monthly payments. You had your dessert first, and now you have to eat veggies and fiber for several months straight. The good news is that you can cut down on many of the purchases you thought were necessary expenses and start laying the foundation for a nice healthy savings nest egg. Just follow the simple and easy steps below.
Filter your purchases
There are two kinds of expenses: one-time expenses or periodic expenses and recurring expenses. Your first step towards the road to financial freedom should be to filter your periodic purchases. Make sure to filter purchases that are redundant, don’t really add long-term value to your life, or won’t produce an effect that can help you earn more money-either directly or indirectly. You will notice that a lot of your purchases will disappear if you apply this filter.
The next step is to filter based on substitution. Look at your remaining periodic purchases and figure out which items you can buy at a cheaper price elsewhere. Make sure the quality is equivalent or comparable. Find the lowest priced replacements. Knock out the items from your list you can substitute.
The remaining items are the items, you still need to buy but you should try to hold off on buying them. Ask yourself: ‘can this wait’? If it can, kick the can down the road and buy the item a few months later on.
Filtering recurring items
Look at the recurring bills you have. The sad news is that a lot of these items can’t be filtered out. There is a reason why they are recurring. First, you can’t knock out monthly installment payments for credit cards.
Next, you can’t knock out water and power bills. Instead of eliminating them, the good news is that you can replace them with lower-cost replacements. For your water and power bills, contact your utility and see if you can switch to a cheaper program that charges you a lower rate if you consume less water or power.
If you are paying off credit cards, look to pay off your existing balance using a no-interest or low-interest credit card balance transfer program. Make sure the card you choose doesn’t have an annual fee.