Wealth Made Simple | Borrow Less, Save More

Have you ever wanted to purchase an item, a house, or a trip to Cancun? It may seem like a daunting task to try and save up for something of that caliber. But at the end of the day, you have to ask yourself how badly you want it. If you want it bad enough, instead of borrowing money from the bank or a loan shark, how about just saving?

Now, in today's financially strapped economy, saving up for things like that can feel like a luxury. Even savings are used just to put food on the table, due to high inflation and absolutely no increase in wages. The average worker is holding down two jobs, just to make ends meet. But what if we told you that you can afford groceries and still save up for that trip to Cancun? It all really boils down to the simple principle of discipline.

To practice, write down 5 things you want. Prioritize which one goes at the top and which one goes at the bottom. Then, look at your list and rate how badly you desire these things. The scale is from 1-10, with 10 being you want them super badly. Once that's determined, take a look at your bank account (don't be scared to look at your bank account). Look at any past transactions and see what all you can do without for at least one month. Yes, that means cancelling any subscriptions you have; or cutting back on eating out with your friends (or by yourself, if that's what you prefer). Whatever you cut out, that's the money you can use to save up for your number one thing. Here is an example list, along with an example subscription list and their prices:

1. Family vacation to Cancun - 10

2. A brand new Lexus Sedan - 8

3. A 3 bedroom, 2 1/2 bath house - 5

4. Some new clothes - 3

5. A brand new phone - 1

Subscriptions and their prices:

1. Netflix - $15 (cancel and use that $15 for the family vacation)

2. Instacart Premium - $20 (cancel and use that $20 for the family vacation)

3. Disney+ - $8 (cancel and use that $8 for the family vacation)

4. Uber Eats orders - $50 (stop using for a while and use the $50 for the vacation)

5. Online shopping - $100 (stop and use the $100 for the vacation)

Overall total savings: $193/month

It may not seem like a lot, but every little bit adds up. When we do this and set aside the money in a savings account, then the family vacation to Cancun can happen. It takes time and discipline. But at the same time, you can use the 50/20/30 rule to further increase your savings habit. At the end of the day, we are practicing good budgeting skills. And when we develop these good habits, it becomes natural to save more and borrow less. After all, the cost of borrowing is getting higher and higher due to increased inflation. So let's practice these simple tips this summer (and even before the Christmas holiday season).

What's at the top of your list of things you want to do or places you want to go? What action steps are you willing to take to bring that list into reality? Let us know in the comments below.

Until next time, this is Tinyboss Blog, over and out!

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