Ways I am Trying to Live Below My Means

I see it everywhere by everyone with financial advice. In order to gain wealth one must live below their means. The following is about my decisions and choices I have made in order to not only spend less than I earn, but also spend less in general. Through the use of a budget and the fantastic money management help from Mint.com I was able to begin to identify where my money was going. Mint.com is great because it allows me to see and study trends about every single financial transaction I make. Here are my findings.

The single biggest money pit I have found is my cell phone. I was blowing $120 a month on my cell phone through unlimited Internet and messaging plus all of the other bells, whistles, taxes, and hidden fees. I began to study my cellular bill to find ways to reduce this recurring cost. We all may think cell phones are a necessity and in some ways they are, however, are all of the added available features we use really necessary? I decided that I was going to reduce the amount of text messaging I do per month as well as cut off my internet. I am lucky enough to have a phone with built in WiFi, allowing my use of the internet from any wireless hot spot on my phone. Through the minimum calling plan, the smallest text messaging plan, and cutting off my cellular Internet I was able to reduce my phone bill by over $60 which is going to save me over $700 a year. I think that much is worth not using the Internet a few times a month, and controlling the amount of text messaging I do.

Another problem was subscription payments. It is a difficult discipline to really teach yourself the difference between a want and a need, but I decided that all magazines and other subscription services for entertainment and the like were a luxury I did not need. After some time I convinced myself to cancel all recurring subscriptions that couldn't directly benefit me on my attempts to gain wealth. If it couldn't help educate me or positively benefit me I didn't need it and immediately canceled my subscriptions. Cutting these off will save me about $300 a year. Between my cell phone and the subscriptions I essential am going to earn an extra $1000 this year by reducing my expenses.

Next on my list was to reduce my utility bills, eliminate the storage unit I've had for years, and to reduce my credit card payments. Improving conservation can reduce your expenses. It makes sense to not be wasteful with things like water and electricity. A large burden on my yearly finance was a storage unit I've had since I moved years ago. Full of stuff I haven't touched or needed since I put it in there. My idea is to use Craigslist to begin selling things at no cost to myself instead of throwing it out or trying to sell it on ebay, beyond that I hate garage sales. Once I have sold everything of value and pocketed the cash I think I am going to donate what I can and throw the rest out. Once my storage unit is gone I will be able to save a good $600 per year. Last on my list was credit card payments. In order to remove all of my credit card debt and maintain lower monthly payments necessary to pay off the cards every month I am going to have to learn great spending discipline. It was time I learned the difference between plastic and money, because credit is not money. In order to spend less I needed to control spending. In order to control spending I took advantage of the tools available at Mint.com I researched where I was spending the most and did I really need to spend that money. In quite a few cases Mint.com allowed me to see that I had horrible spending habits. By reducing and controlling these habits I am hoping to be able to reduce my monthly credit card payoff amounts allowing me to more easily pay off my credit cards every month and even to pay off what debt I have in a more timely manner. I'm estimating that reducing my credit card spending and in turn reducing the pay off amounts I will probably end up saving at least $1200 a year or more assuming that I can reduce my monthly credit card spending by $100 or more every month.

Just an added note if you smoke, dip, or drink you should seriously think about quitting or drastically cutting back. Health concerns aside regular use of these is an incredible drain on your wallet. A few happy hours a week can actually add up to quite a bit of money spent over the course of a year. Drinking in a bar at night just once a week can rack up even more money necessarily spent. If you can't quit or are unwilling to, at least consider seriously cutting back or finding ways to spend less in doing so, controlling your expenses.

My goal is to use this extra money to eliminate all of my high interest debt and begin investing more, a serious advancement into my quest for personal wealth.