Recently BuzzFeed ran an article with one of its editors in which she set out to save money over the course of two weeks by only using cash to pay for her necessities and to put her credit card away. During the first week she set a budget of under $60. This included buying food, going out for entertainment, and fun activities like going to get drinks with friends.
The first few days of her first week were a success. She walked down 35 blocks to attend the grand opening of a new Mexican restaurant where she was able to buy lunch and dinner for $2. The next day she went to a local grocery store and bought dinner and coffee for $5. She opted to stay home and cook dinner rather than going out to eat. On her third day she found a new bar and went to get drinks with a friend because of a $2 special they were having. By Saturday night though she had given into her old spending habits and the pleasures she had grown accustomed to and exceeded her budget of $60 by spending $75.
The second week she set a budget of $40 to cover all food expenses and entertainment. This time she buckled down and made it happen. Monday she went to McDonald’s to get her morning coffee and take advantage of their special of $1 coffee instead of going to Starbucks and spending $4. For lunch she went online and found great new restaurants that were offering amazing specials for their lunch and dinner menu’s. Tuesday she was able to spend $5 on lunch and dinner for the entire day.
This woman lives in New York City and was able to live for two weeks on only $115 for her food and entertainment. Everyone has a budget and lifestyle they have become accustomed to and not everyone can live on $40 a week for food and entertainment, especially if you have a family. However, everyone can cut expenses if they had to.
So how much debt do you have? How much do you want to get out from the burden of debt and to remove those recurring monthly bills from your budget?
We suggest tracking your spending over the last two months. Look and see how much money you have actually spent on food and entertainment. Do you have the number written down? Now take 25% off that and live on that remaining amount for the next month. Why? Because now you can take that 25% and apply it towards your debt payments for that month. This might sound like a lot for you today but it’s not that challenging so long as you set a plan on how to live off the remaining balance and if you PUT YOUR CREDIT CARD AWAY! USE CASH! As we have mentioned in previous blogs, paying with credit cards always cause you to spend more money than you planned.
So set your budget, pay with cash, hide your credit card, and PAY OFF YOUR DEBT!
FIRMS is here if you have any questions or need any advice on how to properly set your budget and stick to it!