Spend Like Your Life Depends On It...For Many of Us, It Does!
/Many people in the U.S. could improve their lives simply by spending smarter. Just look at these interesting statistics:
· Credit card debt is on the rise in the U.S., with the average American household carrying a balance of $5,700 (in California, ranked 4th highest in the nation, it is closer to $10,000)1
· Parents pay for only about a third of their kids’ college expenses2
· 42% of Americans will retire broke3
· 85% of people globally hate their jobs, with 70% in the U.S. hating their jobs according to Gallup4
So, let’s pretend for a moment. Imagine you’re taken into a room, a gun is held to your head, and you’re instructed to cut your spending by a thousand bucks a month or else! You’re given only a telephone and copies of your credit card and checking account statements. What would you do?
Although most of us won’t face this literal scenario anytime soon, many Americans are held hostage by their troubling financial situations. Instead of dealing with it, however, they choose to bury their heads. Despite acute awareness that we need to be saving more for college, retirement, and health expenses while minimizing our debts in order to live our best lives, we carry on through our days as if we have no financial worries.
In the event you do wake up to credit card debt or a retirement shortfall and realize that you are in a state of financial emergency, here are some steps to implement ASAP to put more money in your pocket:
1. Reduce Service Fees. Pick up the phone and call all the service providers you pay on a recurring basis. Start the call by saying, “I’m in financial trouble and I want to see if you can help. How might I reduce the cost of your service?” Be armed with data from at least two other competitors offering the same service you’re calling about, and don’t be afraid to discuss shutting off the service temporarily to score a better deal.
2. Increase Insurance Deductibles. Consider increasing deductibles on car, home and health insurance if you haven’t filed a claim in over two years or where claims have been infrequent. For car insurance, as a general rule, your premium savings in about three years will offset the difference in the deductible.
3. Offer a Room for Rent. If you have a spare room you’re not using, rent it out. You could offer it on Airbnb, rent it to a college student, or advertise it on a local college board. If your rooms are all in use but you have space in your backyard, rent it out for camper parking. You can make sizeable sums of money by renting out your biggest asset—your home or property.
4. Get a Tax Review. Take your return into a local tax office and have it reviewed at no cost for potential savings. Some providers will do a “second look” for you for free and only charge you money if they find a way to get you money back.
5. Opt for Cheap Public Entertainment. Check your local community resources for things to do. Whether it be free concerts, movies, music, books or educational programs, there are myriad ways to find enjoyment through public options like libraries, parks, and free city events. These days, discovering hours of local enjoyment is as simple as a quick Google search.
6. Ditch Your Car. Get rid of your car and embrace biking, walking, carpooling or public transportation. Too drastic a step? Start by using an alternative way to get to work (or work remotely one day a week) and consolidate your errands to one night a week.
7. Visit Mother Nature. Got the bug to travel? Load up your car, pack some snacks and hit the highway with a tent and a couple of sleeping bags. Feeling wimpy about camping on the ground? Buy a camping cot and a killer sleeping pad from REI or Costco to make your outdoor adventure a more luxurious experience.
8. Take Advantage of Rewards. Sign up for a credit card that requires a minor amount of spend to receive a cash bonus. What are the best cash bonus offers out there today? In a matter of six months, you could pocket $2,000 just by spending money on select cards and paying them off right away. Also, ensure that you are maximizing your credit card rewards on an ongoing basis by exploring cards that offer the highest level of cashback rewards.
9. Cut Back on Restaurant Costs. Dining out often can quickly eat into your monthly budget. Tempted to eat out? Have friends over for coffee or a happy hour instead. Short on time and energy? Organize a potluck where everyone pitches in. Want to keep costs low? Order pizza for delivery and throw together a salad with in-season ingredients sourced locally. Another fun concept: breakfast for dinner or a chili cook-off.
10. Make More, Buy Less. To maximize your saving, make things at home instead of relying on the convenience of local businesses. Can’t live without your morning coffee? Make it at home. What about meals? Pack your own lunch to take with you and have ingredients on hand for easy, ready-to-make dinners you can throw together on the nights you work late or have evening activities. Trader Joe’s has an incredible freezer section of prepared meals to keep you covered. You could also double up recipes on the weekend to add to your weekday stash. Make it easy on yourself. Perhaps one night a week it’s popcorn and game night with Shirley Temples or Roy Rogers cocktails. Just get creative!
11. Stop Unnecessary Services. You may be paying for services you really don’t need. Or perhaps you have recurring services on autopay that you’ve forgotten about. Either way, you’re wasting money! Stop these services immediately, so you can start saving more today. Here are a few common services to consider dropping:
a. Security Systems. Ask any police officer. The best security systems to have are a barking dog and a locked door. Feel you want to go the extra mile? Add a “ring” doorbell system to record people at your door.
b. Magazine Subscriptions. Magazines, whether print or digital, often go unread. Cancel your subscriptions and see what you really miss. Catch up at the library instead, which often has an incredible selection.
c. Software Subscriptions. If you don’t use it, drop it. If you do use it, see if you can save by paying annually instead of monthly.
d. Cable TV. Get rid of your cable and surf the web instead. In fact, you might find more joy in your daily experience by calling TV quits for six months.
e. Internet. Consider relying on your cell phone hot spot and cell phone data plan instead of having separate paid internet.
12. Get a Side-gig. Need to make some extra cash? Consider a side-gig until you have dug yourself out of the hole. Check out this map of 40 side hustles, along with apps and websites to help you get started: https://www.titlemax.com/discovery-center/personal-finance/40-easy-ways-to-make-money/.
Failing to save enough to support eventual retirement or carrying credit card debt are proven ways to destroy your financial life. Not only does fiscal laziness prevent you from pursuing travel, career changes, hobbies, and other life enhancements, but financial challenges can destroy relationships and your own sense of personal dignity. Take action today to peel away the layers of spending and give yourself more freedom, stronger relationships, and a better life.
1. Hoffower, Hillary. (Aug. 9, 2018). “The Average Credit Card Debt In Every State Ranked.” Business Insider. Retrieved from https://www.businessinsider.com/average-credit-card-debt-in-every-state-ranked-2018-8
2. Dickler, Jessica. (Oct. 18, 2018). “How Parents Pay for Their Kids College.” CNBC. Retrieved from https://www.cnbc.com/2018/10/17/how-parents-pay-for-their-kids-college.html.
3. Huddleston, Cameron. (Jan. 16, 2019). “42% of Americans will Retire Broke.” [Add Source here.]
4. Burrows, Sara. (Sep. 22, 2017). “85% of people hate their jobs.” Return to Now. Retrieved from https://returntonow.net/2017/09/22/85-people-hate-jobs-gallup-poll-says/.
