Money can't buy happiness, but as plenty of have said, it certainly helps, and often it's only a lack of money that stands between you and your dream. Whether that dream is quitting your job to start your own business, buying a home, long-term travel, setting up an animal rescue or absolutely anything else you might long to do, all the grit and determination in the world won't get you where you need to be without the financial resources. The good news is that grit and determination can help you make the adjustments you need to save up the cash that allows you to pursue those dreams.
Learn How to Spend Less
Cut your spending is advice often given unhelpfully, as if that isn't something you'd already be doing if you knew how. Spending less is one component of knowing how to manage money, and managing money is a skill like any other, meaning that you may have to teach yourself how to do it. Learning to spend less starts with knowing where your money is going in the first place. This involves looking at both your fixed and variable expenses. The former refers to costs that are always the same, such as your rent or mortgage, your insurance payments and your debt repayments. Groceries, utilities and entertainment are all variable expenses.
Cut Your Fixed Expenses
Fixed expenses make it sound like you are stuck with these costs, but that really isn't the case. Could you move someplace cheaper? Online comparison engines may help you determine which company offers the lowest insurance rates. Some companies also offer discounts if you use them for multiple types of insurance.
Dealing with Debt
Debt may seem like a particularly inflexible expense, but even this is not the case. You may be able to significantly lower interest rates or free up more cash by refinancing your home, your car or your student loans. A student loan calculator can help you determine potential savings from a refinance. These savings can be substantial over a long period of time, so this may be a particularly helpful approach when paired with a long-term goal, such as retiring early. If you have credit card debt but good credit, you may be able to move your balance onto a zero-interest card. One of the advantages of reducing expenses in this way is that aside from the initial research and paperwork, these are generally painless ways to save money.
Cut Your Variable Expenses
Most articles on budgeting focus on cutting variable expenses. Chances are, whether it's groceries, entertainment or the temperature at which you keep your home, you can make a few small changes here that turn into savings. There is one important caveat when it comes to cutting your discretionary spending. Some people are able to make drastic changes, such as quitting eating out altogether, but if you are too extreme, you may be setting yourself up for failure. Your approach should be not to remove every source of pleasure from your life and budget but to make sure that you are truly getting your money's worth on what matters most to you.