Not sure how to begin paying off debt? Here’s a couple of ways to begin your frugal living journey and get you on a path to debt free living.
Broken record
I feel like I keep going on and on about the key to financial freedom, and I fear I might become a broken record. But being debt free has been the most impactful part of my financial life and I won’t stop going on about it until I stop finding articles about how hard it is for people these days with low wages, inflation and other factors that are keeping them back.
Times are tough
I agree that times are difficult. Inflation is taking its toll. Wages are terrible. Opportunity is odd, with companies posting jobs that don’t exist. CEO’s want people to go back to the office, even though people have proven they are capable of working from home. When I consider all the challenges we face, it’s no wonder people feel trapped with debt.
Understand your income and expenses
The three most expensive areas of life are in order, housing, transportation, and food. Knowing this take a moment to look at your income and expenses and understand that these areas will consume about 75% of your income if you are part of the average American household.
Ideas to save money on housing
How can you find ways to reduce your output for housing, transportation, and food?
Well, if you are renting, consider moving to a more affordable place. That might mean living in a less desirable area, living in a place that offers fewer amenities, finding roommates to offset your expense or finding a place to rent a room versus an entire apartment all on your own.
If you own your home, or more likely have a mortgage, you’re stuck until interest rates come down and you can refinance. However, you still have the option of renting out a room to help offset your expenses. If you live in the city and have a garage you can rent your garage. It is inconvenient to rent a room or give up your parking space, but nothing is forever, and if you can use your space to earn and lower your debt it might be worth it to get out of debt as soon as possible.
Ideas to save on transportation
If you have an older car that is paid off, that’s great. If you have a car payment, the only thing you can do is learn from your mistake. Next time you are looking for a car, buy used and pay cash.
If you are in a position to take on car poolers, you may be able to offset your gasoline cost by asking for gas money from your passengers or by getting a ride several days per week.
Actively look for lower cost on your insurance. Make sure you follow the manufacturer’s recommendations for maintenance. Car repairs are more expensive than regular maintenance.
If you are into math and problem solving, try to figure out if it is more affordable to take public transportation. This involves a lot of research, but if you can save a few hundred dollars each month it is worth it.
Ideas to save on food
Food is the third highest expense for most households. Saving on food cost can make a huge difference each year. Up to $12,000.00 for a family of four simply by avoiding restaurant food, most families choose take out because work, children, schooling, after work activities and after school activities take time. We are all exhausted from all of our obligations, but with a little planning cooking from home can be a rewarding part of your week. If you don’t know where to start, get my book, “Few Buck Lunch. Cook Food. Save Money.” It’s free to download on my website.
Eliminating meat can save $750.00 per year, per person in your family. Giving up meat is no big deal; you’ll find that many plant based options are delicious, nutritious, and affordable.
Other ideas
There are several other areas that you can look at when considering how you spend your income, and how you can reduce your expenses.
Engage in mindful spending. Never go shopping when you are tired or bored. Make a list and stick to it. If you shop online, add the desired items to your basket and wait a few days to make sure what you are buying is truly something you need and love.
Convert your wardrobe to a capsule wardrobe over time. If you are accustomed to buying a few new outfits with the change of the seasons, make the next seasons outfit versatile so that it can be worn on rotation. Focus of accessories.
If you have school aged kids, they may need new clothes at the beginning of the school year. Buy fewer clothes at the beginning of the school year and plan of a small refresh mid way through. You kids will outgrow clothes fast and a midyear replenish in the right size will be a better investment than a lot of items that won’t fit after five months.
By the way, your kids need way fewer toys than you are buying. A lot of stuff is overwhelming for adults; imagine being seven and having more stuff than you can really manage. Kids will find ways to be entertained regardless of the toys they have available to them. Books are a great investment, toys are not. I’m not saying they don’t need any toys at all, I’m just saying take an inventory of what you already have and make sure the next toy you buy will have lasting power. If you really want to be clever, go through all your kids’ toys, take half of them and put them in storage. After six months swap them out for the toys in the toy box, they will be delighted with the toys they forgot about.
Finally avoid things that will create havoc and expense in your life. Floss your teeth and go to the dentist two times per year. Stay healthy. Don’t drink or do drugs and drive a car. Don’t get into a car when the drive is impaired. Look both ways before crossing the street. Don’t text while driving. Wear a seat belt. All this is good common sense.
Ultimately living a frugal life and being debt free will be one of the most liberating things you can do. Living debt free means making professional, educational and investments in person growth possible.
If you want to learn more about frugal living, buy my book, “Never Worry About Money Again: Gain Financial Freedom By Becoming Better At Managing The Money You Have”
