We all could use a little guidance when it comes to reducing our “optional” spending. See what Sylvia did in her budget.
Sylvia was always short at the end of the month and very stressed. Eventually she was convinced to seek the help of a fee-only financial planner who would help her prepare a budget so that she could start saving. For the first step, she was told to write down EVERYTHING she spends money on in the next month. With that she was told to try and categorize what the spending was for: required spending like mortgage and utilities, important spending like new sneakers for her son, and optional spending like eating out. They were able to find several ways to save more than the $300 she was short each month. The biggest was the easiest. She was spending $5-$7 a day for drinks at McDonald’s and at work. She bought a cooler to keep in her car and water and soda by the case. Her $180 in monthly spending went down to $30, already finding half the needed savings. The other $150 required some sacrifices like buying frozen pizza instead of delivered pizza for the weekly no-cooking day. This saved another $60. By the time she left the planner’s office, she had a list of $430 of potential savings.
Sylvia was very happy to trade a lower stress level for the few changes she had to make to reduce her optional spending.
To learn more about budgeting check out our books on financial independence at:
Financial Essentials
Financial Essentials for Women by Women
Financial Independence Essentials for Couples
Raising Financially Independent Children
Financially Independent Teens
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