5 Things that can Break Your Budget
Hey Wealthy Gang! FYI...That’s the name I’m calling everyone who has decided to “Go For Wealth,” once and for all and decided that living paycheck to paycheck is not the only way to live. Is that you? I hope so!
Last month, we discovered ten things that you were probably missing from your budgets. So many of you reached out and booked your FREE 15 minute consultations and it made me so happy! Some of you were ready to make sure your budget was complete so you could thrive. CONGRATULATIONS!
This month, it’s only right that we discuss some of the items that are probably breaking your budget. Your budget is complete, you are tracking everything that you spend,but for some reason you are missing the budgeting mark. Why? Let’s get into 5 things that may be breaking your budget to the point where you can’t seem to ever get ahead:
This is a big one, so I decided to name it first. Most of us spend way too much on food. When we grocery shop we buy more food than we need and it ends up spoiling. That’s wasteful. Or how about the double dippers. You know the double dippers... The folks who go grocery shopping and eat out. I tell all my clients, “choose one and get off the fence.” If you are going to eat out everyday then nothing should be in your refrigerator but bottled water. I can even go as far and say purchase a PUR water filter from Target and use water from the faucet. That’s an one-time purchase of roughly $40. Also, if you decide to eat breakfast at home but eat out for lunch and dinner; then only grocery shop for breakfast foods. Eggs, oatmeal, pancake mix, etc. I don’t make a lot of promises, but I promise you if you cut down on food you will save your budget.
2. Cable TV
Who even has cable TV these days? Why are you paying hundreds of dollars for cable TV when services like Netflix and Hulu exist? If you are already paying for Amazon Prime then you have yet another arsenal of TV shows and movies. I know what you-- men and maybe some women are thinking. “What about your sports channels?” My answer to that is this: most bars play the major sports games. Instead of paying for it monthly go watch it at a bar or a friend’s house. This isn’t a permanent solution. This is only until you reach financial freedom. Once you create some wiggle room in your budget then you can add cable back, but for now you have to cut it.
You are not supposed to take advantage of every sale. Every new sneaker does not have to be in your closet. Every new iPhone is not supposed to be in your hand. Stop shopping. Every year, I do a no-spend month for the first 3 months of the year and I usually save anywhere from $1000 - $10,000. I bite the bullet for the first 90 days of the year and then I am set for the rest of year.
Taxes are the work of the devil! Just kidding. :) But taxes are one of the things that I noticed sank my budget more than anything. I had to come up with ways for me to reduce my taxes due. Of course, running a business was one immediate way to lower my tax bill. However, once that business started performing well that benefit went away. Recently, I started maxing out my 401K, HSA, and IRAs. This has saved me well over $40,000 from my gross income being taxable income. Find ways to lower your tax bill by speaking with a tax accountant or tax attorney.
One thing I hate more than taxes is interest. The difference is you can find ways to lower your tax bill; the only way to lower the amount of interest you pay is to lower the principal balance. Rather that is on a loan, credit card or other. That’s exactly what I do. Now, I pay all credit cards in full monthly and before I was in a position to do this I would pay the credit card or debt with the highest interest rate first. I just hate interest that much and trust me it is chewing a hole in your budget. For instance, you may pay a $150 payment on a credit card. Interest then comes in at $100 for the month, you now have only decreased your principal balance by $50 even though you are out of $150. Geesh right?
These are only a few items that may be eating a hole in your budget. There are plenty of other items. No matter how hard or how long it takes earning financial freedom is something you all should decide to do today.