How To Reduce Your Expenses And Debt
So many people are overwhelmed with debt because they purchased too many ‘wants’ instead of recognizing the difference between ‘wants’ versus ‘needs’. That statement can be used to fill-in-the-blank for almost every mistake made by people – which got them into too much debt.
- Purchased a new car instead of used
- Bought ‘too much’ of a vehicle instead of one not quite so expensive
- Cost of a ‘giant’ flat screen TV versus a ‘normal’ size
- Cumulative cost of eating out versus eating in (do it yourself)
- Cumulative cost of groceries when buying too much ‘junk’ versus other foods
- Paying a monthly rental fee on a storage locker, full of stuff they never use and only occasionally visit
- Using a credit card to buy stuff (too easy), instead of cash on hand
- (you get the idea)
There are some bad decisions that impact your expenses more than others. One example is purchasing a vehicle with payments that could have been substantially less if you had not succumbed to your desire to buy the ‘fancy’ model (or whatever). Those payments will stick with you for many years.
Paycheck to paycheck. That’s how the majority of people live. It doesn’t have to be that way. There are ways to reduce your expenses so that you don’t have to live that way.
But first, it quite simply comes down to this…
Don’t Spend More Money Than You Take Home
It’s so ridiculously simple. That is, don’t spend more than your ‘take home’ pay.
You must be able to not only live within your means, but live BELOW your means. What does that mean? Don’t spend more money than you take home. In fact, spend much less than you take home, so you can pay down your debt, and/or save some money.
Reduce Expenses By Identifying Wants versus Needs
If you are going to be able to decrease or get rid of your debt completely, you must have a good grasp of this… You have to be able to distinguish between a ‘want’ and a ‘need’.
This means that you must be honest with yourself.
The first thing you must do is… Take a step back and really take an objective look at your spending habits. You need to be completely honest with yourself.
EVERY purchase that you contemplate, MUST be viewed through a strong lens.
EVERY time, you must ask yourself the following questions…
Why do I need this?
…to help you realize if this is really a want or a need.
What will I do with this?
…will reinforce the answer to ‘why’.
Are there alternatives to this?
…force you to think of other ways or solutions, perhaps less expensive.
What would happen to me if I did not buy this?
…will you suffer without it? How badly? Could you do without or find another way?
The truth is, lots of what we buy is not really necessary. When you have set yourself a goal to eliminate your debt, you can accomplish it much quicker by reducing your expenses to the bone, so to speak. Do without, for awhile. Adapt. Find other ways. Buy used. Purchase less costly foods for awhile. Motivate yourself to change your spending habits so that you can use this extra cash to more quickly pay down your debt. Downsize.
Being debt free from credit cards, car loans, etc., should be a high priority for those who wish to escape the system – the parasitic system that wants you in debt and wants you as a host that they can feed on. Once you are free from this, you will be stunned with the sense of freedom that will go along with it.
The road to becoming debt-free does not have to be miserable. Learn to enjoy the process of being frugal. Learn to enjoy seeing that debt balance going down…
