Many of us have major financial goals including:
- Get out of debt
- Pay off our mortgage
- Save for a rainy day
- Save more for retirement
- Send our kids to college
- Make home improvements
In order to achieve our financial goals though we need to have focus on the big picture but also on the day to day money management. After all those little items and monthly bills can add up quickly.
When you’re in the middle of your life (in your 30s-50s) often you are busy with keeping a career on track, having children, and possibly caring for elderly family members. Meanwhile you’re somehow trying to maintain an orderly house, care for yourself, and create or maintain good relationships with your spouse or partner and friends.
It’s no wonder money often comes last on the list for many of us! As we get busier it becomes a chore we may avoid, or lack of time and attention can cause us to make mistakes that are costly in the short-term or long-term.
In recent months I’ve been busier than ever. Between consulting, blogging, and managing the household and getting the kids from here to there I feel like my life is lacking balance. Despite my penchant for personal finance, I to am falling victim to being too busy to pay attention to the bottom line at times.
I’ve realized I have limited time and bandwidth (or brainwidth if you will) to think about our finances every day, so I’m working on a challenge for myself (and you if you want to participate) to help hone my money skills so I can be a debt crushing, saving money ninja. (more on that soon)
There are two approaches I want to explore in our challenge: Spend Less Money, which will help us save more on everyday expenses and monthly bills, and Earn More Income, which will help us feel more comfortable, save more, and challenge us. Let’s explore them both a bit.
Spending less money is a no brainer when you are looking to achieve financial goals in the long or short term. Starting with major expenses and then cutting back on monthly and daily expenses will help you shave hundreds to thousands of dollars a year off your bills. I recommend looking at your yearly expenses versus monthly expenses since that $100/month cable and internet bill doesn’t seem high but $1,200/year is a ton of cash!
There is a point where you’ve reached your spending decrease threshold, where giving up anything else may make you revolt and spend more. It may take some testing to know your own limits. For instance, takeout once a week may be worth the expense if it gives you more time with your family, and is a ‘treat’. Or maybe you don’t want to give up that morning cup of Starbucks, no worries, just know you can have your coffee and drink it too, but that pastry may need to be put back in the case for your wallet and waistline’s sake.
If you are comfortable being frugal, go for it, but not everyone is interested in squeezing every penny out of every item they own. For some it can be fun, a hobby that keeps them from spending a fortune, while for others it can be a drag to think about saving 2 ¢ per roll of toilet paper by using less squares.
I know many people who bemoan that they can’t earn more. No matter what you do though, you have opportunities to earn more money.
To start earning more, start at home. Declutter and sell or donate (tax write off!) things you just don’t need. For many people they can earn several hundred to 1000s doing this simple task. Who knows maybe you’ll find a long lost family artifact that is worth millions. 😉
Now that you have space and a simpler home, you can focus on making a list of the activities and skills you enjoy and/or you excel at. This could be anything from writing copy for a website to teaching kids to swim. If you feel stuck trying to come up with your skillset look at your resumÃ©, phone a friend or family member and ask them what skills they see you have, or even look at job boards for inspiration.
For most people they want to do something outside their day to day work (whether you work outside the home or not ;)). Focusing a new skill might even be a great way to open up new avenues to earning more money.
Starting a business may seem scary, but it’s pretty straightforward to set up a business and as long as you aren’t dealing with inventory, employees, and stock it can cost under $100 to start.
Personally I’ve done everything from babysitting, teaching kids to swim, working in a retail store, running a small organizing business, and start a blog and a boutique consulting firm.
Spend Less or Earn More? Which is it?
I think the answer is pretty clear that they go hand in hand. Spending time focusing on the big picture, and then day to day spending will help keep your expenses low. Once you have a handle on spending less, shifting focus to earning more is a smart move. It will take some work and ingenuity to earn more money, but in the end it will get you closer to your goals. What do you think though?
Where do you focus your ‘money’ time-earning more or spending less? Do you have any advice you’ve learned that made either easier?