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Bad budgeting keeps you in the hole
A friend who made six figures magically always needed loans from me. After a while, I finally asked, “What’s going on, man? Like wtf. You make six figures, have dirt-cheap housing, and multiple income streams. Where is all your money going?!”
Sound familiar?
Most People Don’t Have To Struggle Financially
For many people, all of the right cards have been handed to them. They earn great money, their housing isn’t expensive, and they have multiple income streams. Yet, they’re constantly struggling financially to make ends meet because they’re living above their means. If you live above your means long enough, you will drive your net worth into the ground.
Getting into debt is easy and fast. Getting out of debt is hard and long.
10 Things You Can Do To Stop Running Out Of Money Every Month
Decrease your housing costs. If your housing is too pricey, downsize – at least temporarily. Get roommates or stay with family for a while. Nothing has to be permanent.
Create a budget, and follow it. Use an app, a spreadsheet, or whatever works best for you. Always know what goes in and what comes out. If you don’t know, you can’t do better than you are now.
Get rid of the car note. Does your household need more than one or two cars? Do you need a car at all? Could you downsize your current car? If so, do it. Save yourself hundreds of dollars a month on car insurance and car notes. The car note will get you and raise your cost of living up in a heartbeat. I call it cash-burning on wheels.
Eliminate expenses. How many subscriptions and monthly memberships do you have right now? I saw an email yesterday reminding me of a subscription I am canceling immediately. I don’t need it. That will save me x dollars yearly, which can return to investments.
Acquire a new income stream. If you have a full-time and part-time job, what new income stream could you acquire that doesn’t require too much effort and is within your wheelhouse? Every skill can be monetized – whether you believe it or not-research how you can monetize your skills and learn how other people are making additional income.
Decrease the entertainment and recreational costs. Some of you part non-stop. That’s great if your bank account can afford it, but for some people, all the recreational activities are taking a toll on the bank account. Find a way to have fun without breaking the bank so you don’t have to wake up the next day with a double hangover.
Throw a large percentage of your money into investments. The more you keep, the more you earn. The more you invest, the faster your net worth grows. Many people pay for everything and everyone else’s stuff before themselves (investing and saving). As soon as you get paid, invest a percentage of your income, and figure out how to utilize the rest to live off.
Quit shopping. I get it; there is always something cool to spend your money on, but you jump into dangerous waters when you’re sacrificing your net worth and financial health to spend money on things that don’t positively contribute to your financial situation. Utilize the 72-hour rule: Wait 72 hours before making small and large purchases. Then, ask yourself: how will this purchase affect my current financial situation? For some people, you should give up shopping altogether for a while.
Read some books on personal finance. If you’re not learning, you’re not growing. If you’re struggling with finances, research, read, and learn from others to master this area of your life. Be sure as you learn new knowledge, you apply it, or you’re just wasting minutes and hours of your life. Knowledge is worthless without application.
Spend less than you earn; this is the one thing that will ensure you have money left over every month. If you live below your means, you will never have to worry about money; it’s the simplest and most effective financial solution to most money problems.
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.