Although money does not buy happiness, it does impact our happiness. Having money can provide us with the freedom to live our lives the way we choose. Once we determine what makes us happy, we can then design our money to support our personal goals. In my book, many topics are discussed that can increase your happiness and your financial security.
This entry focuses on big-ticket items, which can have a huge impact on increasing your savings percentage. Clearly, these are not easy changes, such as eating out less often to save money. However, ponder these with an open mind.
Do you live in a house that is more than you need? Oftentimes, it is not just the house or the monthly mortgage payment that is a problem. It is the maintenance, paying someone to take care of the lawn and gardens, the property taxes and the homeowner’s insurance.
Downsizing to a smaller house or apartment may seem like an overwhelming task. However, it can lead to drastic reductions in your annual budget and much less stress. It would have a very positive impact on your financial security, and it may improve your health at the same time. It can also free up time so you can explore new hobbies, spend more time with friends or exercise more. A simpler lifestyle has wide-reaching benefits.
Do you need to replace your car during the next few years? Could you stretch your car’s life to ten, twelve or fifteen years? Do you need to take an expensive vacation this year, or would weekend or day trips nearby be just as fun?
Certainly, short trips require less time to plan, and they are often less stressful. There are probably nearby areas you have never explored. You could decide to take a major vacation every other year instead of every year. These “big ticket” items can have a major impact on your savings. Instead of taking a $5,000 vacation this year, spend $1,000 on small trips and save the remaining $4,000.
Once you have identified some areas where you can reduce your expenses, set up an automatic saving system to “scoop” that money into your savings or investment account at the beginning of each month going forward. Within a few months, you will not notice that you have reduced your spending, but you can celebrate that your savings percentage has increased.
I welcome your feedback on strategies that have helped you reduce your expenses and increase your savings.
Photo by: by Thomas Hawk
