No judgement if your tastes skew a little more extravagant than your budget indicates. I think most of us know what it’s like to not have everything we want.
It’s an eternal struggle. Our money is limited but the list of things we can potentially do with it is not.
The quickest win is to cut expenses where possible. A dollar saved is a dollar earned (and won’t be taxed!). Trimming the budget = instant savings.
For most of us the three biggest expenses are housing, food, and transport. If you can cut down on any (or all!) of these big ticket costs you’ll be saving money every week/fortnight/month on these regular expenses.
While renting I always endeavoured to keep rent as low as possible, but now that I own I’m making extra principal payments with the aim of eliminating the mortgage outright earlier than scheduled. We’re a one-car household, which saves an untold amount of money, and while we could easily spend much more on groceries and eating out (and would love to) we keep it in check as much as possible.
Other recurring categories to look at are all your utilities and subscriptions – internet, phone, power, water, TV, gym, etc. I have a fear of commitment when it comes to these things and have no contracts for any utilities. That said, I do have a Spotify subscription, mainly for music on my commute!
Sometimes there’s no way around it – you just need to bring in more money.
The most basic existence in today’s world costs money, and the kind of life you want almost certainly costs more than that.
If you can’t achieve what you want on your income, or at least make progress towards it – even after cutting back and ruthlessly prioritising – you may need to grow your income.
Whether that’s by diversifying your income and making money on the side, learning to negotiate or change jobs to make more, or even retrain and upskill in order to increase your earning potential, there are options.
In my experience this has made the biggest difference. Even when I was first starting out I was constantly side hustling to earn more money to squirrel away for my goals.
Making more has seriously supercharged my ability to get ahead. With that extra money I’ve been able to save and invest, buy a house, stop buying clunker cars. Quite simply, I could not have gotten this while making $40k, because there’s only so far you can trim expenses. I increased my income $15k overnight, and almost $30k in under 2 years – no amount of frugality could have achieved that same impact.
If you want to get right back to basics, the key thing is to spend less than you earn. And thus there are only two ways to improve your financial standing are: spend less and/or earn more.
And when you can combine the two – lower expenses and higher earnings, you sprint toward your goals!
There’s a quote: A millionaire is made $10 at a time.
What does this mean? It means that your $10 a day coffee & slice habit adds up real fast. As in, that alone is half the payments on a brand new car. Or more than a couple of years off your mortgage…
Sure, that assumes you have a daily habit though. Many of us don’t. https://nzmuse.com/2016/07/whats-latte-factor/
Both of those are equally important. And once you start to earn more, be aware of lifestyle inflation.
I allow myself a champagne budget on one thing (kind of): food (and drink. Preferably made by someone else and without me having to do the dishes.) But to make up for that, I make sure the rest of my “wants” are managed- I buy clothes once a year, I don’t keep up with the latest gadgets and gizmos and games…etc
That is some impressive income increases, congratulations on that!
I hope you keep up the frugal habits like being a 1 car household even with your continuing increased income – that is when you will truly win and leave all those people with “lifestyle inflation” in the financial dust.
For years, we’ve been on the spending less side, creating enough of a gap so we can get a head a little. It’s when I feel like we’re saving all we possibly can that I seek out more income (through side hustles). Doing both can really get you ahead.
I think it’s great that you have been able to save and earn more and you’re working on your mortgage!
Spend less and live below the means are the helpful strategies to achieve those financial goals.
I can completely relate to this and agree that increasing your income is one way to solve the “I have champagne taste on a beer budget” problem! I have done that over they years. The hard thing for me was that my spending increased proportionately with my income so I wasn’t saving alot until I figured out how to cut back!
I totally have a fear of commitment too. I feel like hyperventilating whenever I have to sign a lease.