A new year is upon us and that probably means you’re taking inventory of your life and making some new goals for 2017. Whether you’re deeply in debt or already on the path to financial freedom, there is usually always room for improvement. Mr. MMM and I haven’t always been on the FIRE (financial independence retire early) path. In fact, there were many years that we each spent in debt and blindly floating through life on paths we were not particularly happy to be on. What changed? Lots of stuff. We faced our debts head on, we decided what we truly valued in life and decided to go for it, and then…we met each other! Read more about our frugal 2015 wedding here! So, whether you’re married, single, doing well, or drowning in debt, this post has something for you! Read on for some quick financial wins for the new year. Yes it’s cliché, but I’m going to say it anyway…New year, new financial you!
Quick Financial Wins
There are several things you can do immediately to improve your financial situation. See said list below for tips:
- Focus on paying off credit card debt
- Cancel your cable – try Netflix, Hulu, YouTube, etc.
- Cancel your gym membership – work out at home
- Make your own coffee and cut out the designer Joe
- Set your thermostat for a few degrees cooler in the winter and warmer in the summer
- Have a staycation instead of a vacation – we did this in the fall and had a blast! We even did horseback riding 15 minutes away from our house!
- Do a clothes-buying ban – I’m heading into my second year and going strong
- Generally speaking, swear off any sort of over-consumption – you do not need the latest tech gadget or another pair of designer boots
- Combine auto trips – use your car as little as possible – this saves on gas and maintenance
- Cut out the restaurants! That goes for fast food, too!
- Entertain yourself and your family at home – the possibilities are endless
Big Ticket Wins
Let’s say you’re already living a reasonable lifestyle but want to kick your finances into high gear and set yourself on FIRE. Try some of these big ticket wins:
- Downsize to a smaller home or apartment – contrary to popular belief, kids don’t need a huge house or the latest luxury car to have a happy childhood
- Rent out a room in your house
- Charge your adult kids living at home rent 🙂
- Resist lifestyle inflation with elevated income – keep driving your paid off car and living in your smaller home
- Make the switch to a one car family – assuming you currently have more than one
- Move closer to work – essentially cutting commute costs
What To Do If You’re Struggling To Make Ends Meet
If you find yourself in a position of intense financial struggle, you should take a hard look at your expenses, as well as your income. Make a written budget for each month at the beginning of the month. It’s possible that you’re just not earning enough to save after basic living expenses. In this case, you must get creative and find a way to increase your earning potential. Perhaps you could move in with a family member or get a roommate. Try a side hustle. Plenty of people make extra cash by delivering pizzas, babysitting, or driving for Uber. Check with your employer to see if there are any opportunities to make more money in a different position or get a raise in your current role. A long term solution might be gaining a trade or degree to qualify for a better paying job.
Increase The Gap
The bottom line is to create as big as a gap as you possibly can between your income and your expenses. The big items are housing and transportation. Increase the gap and use the difference to invest. This concept also goes by another name – living below your means. It’s not rocket science, but it’s
sometimes oftentimes difficult to implement because we fall prey to the fancy car and the new shoes. Engage brain. Know what you want for your life and your legacy and work your butt off to get there.
Now, after you make some changes in your financial life, use an investment calculator (like this one) to see how much you’re saving over the course of 1 year, 5 years, and 10 years! The amount is astounding, I promise you! Now post it in the comments so we can cheer you on! Go YOU!
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