It’s time for another Money Monday segment on YouTube! This is my new weekly segment where I cover personal finances 101.
This is an initiative I started a few weeks ago because I saw a major need in the audience to go back to basics with personal finances. People want to jump into entrepreneurship right away, but they don’t even have a basic understanding of money. Because of this – they are locked out of being able to invest in the programs they need to start businesses.
Additionally, entrepreneurship won’t necessarily solve your money problems. Unfortunately, I feel that many out there are going into entrepreneurship out of desperation due to financial struggles. Because of this, let’s address the personal finances first.
In this week’s segment, I’m covering 3 places where you can reduce expenses to free up to most money. And no, I won’t be mentioning lattes.
Personal Finances 101: The THREE places you can reduce expenses to save the most money
Basic personal finance advice will tell you to save money by cutting out lattes, not shopping and not spending unnecessary money. On principle, sure, this logic makes sense. However, it’s not the most effective way to save money quickly.
One thing I’ve learned to live by over the years is the Pareto Principle, otherwise known as the 80/20 rule. That means 80 percent of your results comes from 20 percent of effort. It’s true in business and it’s true in your personal finances.
So what does that look like when saving money?
It means reducing the expenses in areas that cost you the most money. This includes:
It’s no secret that we have an affordable housing issue in the U.S. It’s damn near impossible for one person or even a couple to afford a one bedroom apartment in any U.S. city with current wages.
I’m with you that this is a massive problem – but here’s the thing – you can’t wait for our government to get it’s act together. At this point, take matters into your own hands.
That begins with questioning what we’ve been told about housing. Who said you need to move out as soon as you turn 18? Who says you can’t have roommates? Who says you need the biggest house or apartment you can find? Who says you can’t house hack? All of these are options in order to drastically reduce your housing expenses.
I walk my talk here guys. I lived at home for seven years before moving out to save money and start a business. It’s one of the best decisions I ever made. When I did move out, I lived with a roommate to reduce expenses. And when that apartment was no longer working out, I moved back home to help my family and save half my paycheck.
People always wonder how I can handle emergencies and how I have savings – that’s how.
Another area where you can drastically reduce expenses is transportation. I’ve never owned a car. In fact, I hate driving in South Florida so I avoid it as much as possible. I work from home most of the time so I can just use Lyft to get anywhere else and it’s cheaper than paying for a car or insurance. Before the days of Uber and Lyft, I worked near my home and took a bus to work.
Again, this allowed me to save a lot of money very quickly.
Food is another area where we tend to spend too much money. Now, speaking as someone with a thyroid condition I have a specific nutrition plan so I tend to spend more money on food. In fact, I make my life easy by having a meal delivery service that fits my needs. It’s not as cheap as going to the grocery store, but it’s also not that much more expensive and it saves me time.
That doesn’t mean I still can’t reduce food costs though. How many times have we overdone it at the grocery store? Or how many times have we done one of those home cooking subscriptions only to order out? Let’s be mindful of this moving forward.
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