As I was thinking about it, I decided to give you a concrete example.
Inflation has been through the roof locally… so I found that my money was not going as far as it used to. I needed to do something about it. So one fine day I sat down and asked “how much am I spending on coffee?”
Ok… I go down to the store to get groceries and they have a coffee shop there. I like their Latte… this is round numbers three dollars… ok that is 18 dollars a week… I also like to go to the local coffee shop to write… add two more coffees there a day… that is 36… so the grand total is… fifty four dollars, in fact a tad more, so lets say sixty.
Ok… this is just coffee… after I did the math, I am down to buying a cup of coffee ONCE a week, when we meet for the writing group… hell not even coffee, but either tea, as in iced tea, or English Breakfast tea. This went down from 52 dollars to less than five a week.
That is how you cut down discretionary spending.
Another idea… locally at the Price Club I can buy movie tickets for seven dollar each for the movie theater. When I go to the price club I buy several sets, why? the regular ticket is close to 20… for me and my husband… but we can spend fourteen to buy the tickets, allowing us the luxury of buying a drink at the theater and still keeping this at a reasonable price.
Oh and here is the one that shocks most folks… see that credit card… you know the one… pay it ALWAYS in FULL at the end of the month. If you don’t have the money for any item, don’t buy it. Massive example, we just replaced our computers… both were paid cash.
But, but… the interest alone is a killer. Do the math… for every moth you don’t pay in full you are paying quite a bit of money… anywhere from 14% to 25% APR, depending on the card. Ugly secret, they try to make you pay over twenty years, anything, which means you pay for your stuff in interests two to three times the original price, if you just pay the minimum. So pay them down, as fast as you can, and don’t buy things unless you can pay at the end of the month.
Will it put a crimp on your current lifestyle? Perhaps… but I sleep at night and we have savings in the bank.
Oh and once you get into these habits, then invest in software if you think you need it.