If You Can Not Increase Your Income, Then You Must Decrease Your Expenses.
Are you struggling financially? Things are tight for my family at the moment. We are making it because of savings, but we need to make adjustments to our income, spending, or both to create a strong financial foundation.
There are two ways to fix a financial problem: make more money or spend less money.
Make More Money
We tend to think that making more money will fix our financial problems. I hear people talking about getting a raise, picking up a part-time, job, starting a side job that they can run from home, blogging on Steemit (my personal favorite), and many more ideas.
If you have lots of time and limited responsibilities, this is probably the way to go. But some of us have families that need our time just as much as they need our money. In these types of cases, we need to make difficult decisions (in consultation with our families) about the steps we should take.
Having more money does not always fix the problem, especially when a person is not responsible with money. Some of us are not good at managing money. We spend too much (no self-control). We have no idea where our money went (no budget). But we can overcome this challenges by learning from someone who handles money well.
I like to think of money as a resource that helps me accomplish my goals, but I have to be in control of money in order to reach those goals. I can not allow money to be in control over me. My dad taught me about the 10/20/70 model when I was young. Now that I am a dad, I teach my children this principle as well.
The 10/20/70 model helps us define categories of money.
- 10 percent for blessing others - Dad taught me to bless other people with my financial resources. This typically has occurred by giving directly to a church, but in recent years I have taken a more direct role in deciding how I bless others. I want to teach my children to see money as an opportunity to help other people.
- 20 percent for savings and retirement - Dad taught me to save for the future. It is important that we enjoy today as well as play for tomorrow. Many of us are not able to save because we are in debt. Debt is robbing us of today and tomorrow.
- 70 percent for expenses - That is why I try to limit my spending to only 70% of my take-home pay. If I get a raise, GREAT! I have more to give, save, and spend. But if I get laid off and find a less desirable job, I will have to make a tough decision because I am still committed to only spending 70% of my income. I want to control my spending, not let it control me.
Decreases Expenses
Sometimes in life, we have to sacrifice. If we are not able to increase our income we must decrease our spending.
But that not fair! I hear some of you yelling right now. You may not believe it is fair, but it is responsible. I see it all the time (and sometimes even within myself). Young people want to start with a lifestyle that has taken their parents 35-40 years to develop. We want instant financial freedom, but we have not taken the steps to get there.
Gettting out of debt is one of the keys to financial freedom, and that may (probably will) require that you reduce your expenses.
Do you really need .... ?
- the super big-screen TV
- to eat out 5-7 times a week
- 300 channels of cable TV
- a cup of coffee at your favorite coffee shop each morning
- the lastest gaming system
- the latest fashion trends
- the fastest car on the road
- the best house in the neighborhood
I can assure you that you want those things, but do you really need them? Most likely not!
If we cannot increase our income, we need to cut back on our wants and focus on our needs. We might even need to sell items that are keeping us in debt and purchase a cheaper version (like expensive cars) or get rid of it all together (like extra clothes and shoes that we never wear).
These are tough choices we have to make and trust me you will feel the pain of making these decisions. But we sacrfice today for a brighter tomorrow.
Final Thoughts
I want to hear from you.
- Do you agree with the title of this post?
- Do you find it difficult to apply this truth to your life?
- What is you next step to becoming financially free?
I look forward to your comments. As always I will do my best to support you with an upvote and reply back
@SumatraNate
Image Source: https://pixabay.com/en/money-finance-business-financial-2696228/<cetner
Very true!
First and best thing you can do for yourself is take your decoder and dish, place it firmly behind the back wheel of your truck and drive over it.
Then go to youtube or the web and start researching. Research everything and teach your children skills which no one can take from them in this life. Learn about economics and the current fraudulent fiat currency system and the correct way to save.
Never save long term in fiat. Although saving is a good habbit it is in vain if not done correctly. I have written posts on the correct way of saving but if you don't like reading take a look at Mike Maloney on youtube - Hidden secrets of money.
Always remember:
True Wealth Is Your Time & Freedom
saya sangat setuju dengan anda, berbicara tentang hidup adalah berbicara tentang tentang kehidupan, mengendalikan pengeluaran sama dengan mengendalikan hidup, kita sering tidak sadar bahwa pengeluaran yang tidak penting bagaikan penyakit yang terus menggerogoti kita, terima kasih atas postingannya, postingan anda sangat bermanfaat bagi kita semua
Betul! Uang keluar nggak boleh lebih besar dariapada uang masuk.
bagi saya sebagai seorang istri mengatur keuangan keluarga bagaikan seorang akuntan disebuah perusahaan, keberhasilan rencana-rencana kami ada dalam tanggung jawab saya, saya sangat setuju dengan anda, banyak dari kami (istri-istri)menghabiskan uang keluarga hanya untuk kesenangan mengikuti trend terkini, belanja, nonton, makan-makan diluar padahal semua itu tidak penting,
Saya senang @steemitnatural mengatur keuangan dengan baik. Itu pasti berkat bagi suamimu.
I like the 10-20-70 rule. I'm retired now and fortunately made decent investments over the course of my life. But there were times when my family and I had to cinch our belts a hole or two. It's never fun, but it must be done. (Sorry, I've been reading Robert Frost.) It is always prefferable to make more money, but circumstances don't always give us that choice.
Thanks for your comment. Glad you like the 10-20-70 rule. It is a great principle. Congrats on making good investment throughout your life. And even more importantly, congrats on making tough decisions when it was required. I agree. I would love to make more money, but when that is not possible, I need to be ready to reduce the amount of money going out.
Appreciate you stopping by and adding to the conversation.
Super lovely article! And I do agree. Honestly since my income is from Steemit alone at this point and the prices suck so bad, I have to be very choosey with how I spend my money. Luckily I live off grid and have a supportive community, so most of my money is going towards food and seeds! My favorite way to save money is to grow food! Plus, I am totally happy with second hand everything (its the most sustainable and responsible) so I get a lot of things for cheap and free. I live a very happy and blessed life and do not need much at all to do so.
2018 is our year to spend less money and pay off more debt. I like that you have the 10/20/70 model for breaking down your income...I think something like this would be helpful for our own finances. Thanks for the tips!!
Glad to pass along what I have learned and trying to apply. I wish you the best as you pay down debt. Good for you!
First of all, I will say that is very true indeed and..
and...I do not have any dept. I buy things when I have enough money to go. Some time I earn from side job, but my main job is selling coffee bean, even though a bit difficult right now.
Wish you all the best my friend
Good for you for not having debt. I hope that selling coffee beans will be enought to earn an income for your fmaily.
Thank you my friend @sumatranate, wish you all the best too
Your article is very good. In which we can walk the life of the discipline of spending. Nowadays the expenses are high.
I agree that many of the required expenses are high. And unfortunately, many of us make the problem even worse by spending money on things that we do not need. Thanks for your comment. Completely agree that we need to walk the life of the disciplined spending.
I agree, the best way to increase your capital is to actually decrease and manage your expenses in many areas! A lot of people waste a lot of money buying too many clothes that they end up not using or buying tons and tons of shoes, which at a glance seem cheap but the expenses add up!
Agree. Many of us fall into the commercialism mindset of having to buy more and more. We confuse wants with needs.
Very valid point made...control on our expenses helps..making more money.
Both are important, but like many have said, sometimes it is hard to make more money. Regardless of how much money a person makes it is always a good idea to control spending.