Dial Down on Essential Expenses

dial-down-on-essential-expenses-nurse-millennial

In an era of consumerism you’re constantly tempted to purchase things you don’t need, but to get out of debt you should dial down on essential expenses. Don’t let the temptation shift the focus of your financial goals.

Wants vs. needs

When you’re about to buy something you ask yourself, do I really need this? The answer is most likely no, but the little devil on your shoulder is coming up with all the excuses why it’s okay for you to buy the item. We go back and forth with ourselves until we impulse buy and eventually experience buyer’s remorse.

Falling into this thinking creates overall bad habits and before you know it your monthly expenses rack up. It took me a while not to give in to buying new, shiny things, but I’ve finally been able to get out of this habit in order to keep money for essential expenses, to throw at debt, and save.

Stick to the plan

Fidelity’s 50/15/5 Guide applies to each paycheck. You can read my post about it here. Let’s refer back to the 50% of your paycheck that goes to essential expenses. You already know what is essential: food, clothing, housing costs, medical expenses, cell phone bill, car payments, gas, car repairs, and debt payments. If you don’t know how much you’re paying each month then you need a written budget. You can manage your finances easier that way.

Also look at your bank statements. “You can tell a lot about a person by what they spend their money on.” I was embarrassed at myself after realizing I spent $56 at Starbucks in one month. I’m not saying that not spending money on Starbucks will make you rich, but if you haven’t been checking your statements you’ll be surprised at the frivolous things you buy. At one point I had two gym memberships. First of all, who needs to be that buff? Second of all, I’m still not buff. Cutting out random crap from my budget allowed me to put more money toward my loans.

Jay-Z said “You can’t afford something unless you can buy it twice.” Try thinking this way the next time you’re tempted to buy something. Do I need that $12 20 oz. Mermaid Print Starbucks tumbler? Definitely not. Can I buy two of them? I mean I guess I could, but looking at it that way it’s totally unnecessary.

Millennial Challenge

  • What kinds of random things did you buy last month and how much did that amount to?
  • Which bill could you have paid off or how much could you have saved with that money?
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