Fiscal Fridays: SPEND LESS THAN YOU EARN
by Dawn Funderbirk
Welcome back to Fiscal Fridays! I hope you have taken time to think about and set your financial goals. On our Fiscal Fridays blog that was posted a few weeks ago, I gave you a list of financial tips that women should know. The third item on that list (which was in no particular order) was to “spend less than you earn”. I know it seems like common sense that if you spend less than you earn, you will be better off financially. I agree. But sometimes we don’t do things that we KNOW we should do. Like, we know that if we decrease our intake of “bad” food, and we increase our exercise, we will lose weight. Yet we still sit on the couch in front of the TV with the remote in one hand and a pint of ice cream in the other. J We know the rules, but we don’t always follow them.
When you mention spending less, some people immediately think that it means that they have to cut out all “extra” activities that are not necessary for daily living. That is not true. Spending less than you earn does not mean that you have to cut out all of the things that you love to do. It just means that you need to take a look at your spending and decrease (not cut out entirely) spending on unnecessary or excessive things. Or find a less expensive way to do the things you enjoy. You work hard to earn the money so you should enjoy it. But you want to be able to enjoy it now and later. You could do this by decreasing your daily trips to Starbucks to twice per week instead of seven. You could start taking lunch to work instead of buying lunch out every day which hits your wallet for at least $6 per day. With 20 work days in a month, you are spending $120 per month on lunch. If you decrease that to eating out just twice per week, you are saving almost $900 in the course of a year. If one of your short-term goals is to pay off a credit card, that $900 savings would make a nice dent in the outstanding balance.
Sometimes spending less than you earn means that you have to earn more. If you have already cut the “fat” from your spending and cannot spend any less without starving or sleeping outside, then you could try to earn more. If you are already living paycheck to paycheck, and just make enough to pay your necessary living expenses, then there is no room for decrease so you must earn more. You can do this by taking on a part-time job, looking for a new job that pays more, selling things you no longer use/want/need, or starting a side business. (side note: Whenever you can, it’s good to have more than one stream of income.) You can use your talents and skills to make additional income. Maybe you are great at making gifts baskets, jewelry, or cloths. Or maybe you are an income tax guru. Your income could increase by doing that on the side. You could take all of your “extra” earnings and use it towards funding your financial goals.
Spending less than you earn is a big sacrifice for many people who are used to “spending ‘til it’s gone”. But this sacrifice will be well worth it, as you see your bank accounts get fatter, your investments increasing, and you reach your financial goals. Until next time…KNOWLEDGE IS POWER! - Dawn-Charmel
by Dawn Funderbirk
Welcome back to Fiscal Fridays! I hope you have taken time to think about and set your financial goals. On our Fiscal Fridays blog that was posted a few weeks ago, I gave you a list of financial tips that women should know. The third item on that list (which was in no particular order) was to “spend less than you earn”. I know it seems like common sense that if you spend less than you earn, you will be better off financially. I agree. But sometimes we don’t do things that we KNOW we should do. Like, we know that if we decrease our intake of “bad” food, and we increase our exercise, we will lose weight. Yet we still sit on the couch in front of the TV with the remote in one hand and a pint of ice cream in the other. J We know the rules, but we don’t always follow them.
When you mention spending less, some people immediately think that it means that they have to cut out all “extra” activities that are not necessary for daily living. That is not true. Spending less than you earn does not mean that you have to cut out all of the things that you love to do. It just means that you need to take a look at your spending and decrease (not cut out entirely) spending on unnecessary or excessive things. Or find a less expensive way to do the things you enjoy. You work hard to earn the money so you should enjoy it. But you want to be able to enjoy it now and later. You could do this by decreasing your daily trips to Starbucks to twice per week instead of seven. You could start taking lunch to work instead of buying lunch out every day which hits your wallet for at least $6 per day. With 20 work days in a month, you are spending $120 per month on lunch. If you decrease that to eating out just twice per week, you are saving almost $900 in the course of a year. If one of your short-term goals is to pay off a credit card, that $900 savings would make a nice dent in the outstanding balance.
Sometimes spending less than you earn means that you have to earn more. If you have already cut the “fat” from your spending and cannot spend any less without starving or sleeping outside, then you could try to earn more. If you are already living paycheck to paycheck, and just make enough to pay your necessary living expenses, then there is no room for decrease so you must earn more. You can do this by taking on a part-time job, looking for a new job that pays more, selling things you no longer use/want/need, or starting a side business. (side note: Whenever you can, it’s good to have more than one stream of income.) You can use your talents and skills to make additional income. Maybe you are great at making gifts baskets, jewelry, or cloths. Or maybe you are an income tax guru. Your income could increase by doing that on the side. You could take all of your “extra” earnings and use it towards funding your financial goals.
Spending less than you earn is a big sacrifice for many people who are used to “spending ‘til it’s gone”. But this sacrifice will be well worth it, as you see your bank accounts get fatter, your investments increasing, and you reach your financial goals. Until next time…KNOWLEDGE IS POWER! - Dawn-Charmel
