If you have some peers you can perhaps use as a relatively accurate yardstick against which to compare your own life then you might just be wondering how some of these peers manage to afford living better lives. After all, you earn around the same salaries, probably have the same amount of student debt to pay off and you live in the same neighbourhood, drive the same class cars, etc.
It’s a simple matter of better money management, which granted in many cases can simply mean they are luckier than you in the manner through which they handle their money. Not all people who appear to have more disposable cash are necessarily financially savvy. Sometimes it’s just a matter of luck, as indicated, but if you have the right information at your disposal then you won’t have to rely on luck to enjoy that status.
Simply running your daily life like a business will open you up to a whole new world of savings and freeing up some money which you perhaps didn’t even know you were wasting. How does one go about running their daily life like a business though? Isn’t it a lot of extra and unnecessary effort?
Three months of recon
That’s right, it’s going to be quite the painful process in the beginning and it won’t be at all easy, but it’s a case of suffer now and enjoy the benefits for the rest of your life, going forward! It will indeed seem like extra, unnecessary effort in the beginning, but you’ll get used to it if you persist and it’ll start to feel like second-nature.
So what you’ll need to do is run some reconnaissance. I’ll use the word “police” quite loosely because it’s a bit of an overstatement of what you’ll have to do, which is just to keep tabs on what you spend your money on. In addition to this you’ll need to establish your REAL income – the amount of money you really have at your disposal after deducting costs we’re not usually accustomed to deducting, like the amount of money you spend on the fuel you use to go to work.
Three months will give you a good idea about how much money you spend, how much you should be spending instead and how much you’re essentially spending unnecessarily or wasting.
One month of financial-habits refinement
Next comes a month of refining your financial management habits, such as perhaps resolving to buy some of the food you can buy in that way in bulk so that you can cut down on transaction costs, but this should be applied across the board and not just with regards to basic goods like groceries.
The free small business budget templates you would have used to conduct your financial-habits recon can be deployed here too, but this time you would be using such platforms more for planning. These types of resources are great for personal financial planning as well.
Putting the extra money to work
Lastly, you’ll start to see some money freeing up which adds to your disposable income. Don’t fall into the trap of raising your living standards and subsequently spending all the money. Rather look for some investment avenues through which to make it grow.