How Lifestyle Changes Are the Best Way to Save Money
When we are faced with a financial crisis, our thoughts turn to the ways in which we can earn more money. It’s something we are seeing across the world. People are looking for side hustles as a way to get extra money, which is nothing new, but sometimes this doesn’t get to the root cause of the issue. Finances are as much about mindset as they are about money. When we talk about health, the term “health is wealth” crops up a lot, and this is a very good lesson in having a better quality of life, rather than thinking we need to earn more money in order to maintain a certain lifestyle. Lifestyle changes are the best ways to save money. But how can we achieve this?
Having a Financial Plan and Sticking to It
We encounter many people that seldom have financial goals, and this is because they are living a hand-to-mouth existence. If we put a financial plan in place, this gives a structure to hang our lives upon. A financial plan is not just something that would be nice to have, but it gives you the motivation to want to save money in simple ways. For example, if you look at what you would like to achieve in a few decades’ time, perhaps by retiring at a certain age, what does it take to achieve this?
You can then find out how much you would need to save per year to achieve this goal. And if it’s not possible to do this, this is when you can start to look at something like investing. Investing is one of those things that shouldn’t be overwhelming or difficult to comprehend, in fact, it should be part of our financial education. Many people are getting into investing, for example, by using financial trading platforms such as Bit Index AI and many others out there. But investing is a very beneficial tool because of compounding. Putting a small bit of money into stocks or shares products can bring about a significant return a decade down the line. This is why you’ve got to understand what you would like to achieve, not just in your life now, but in the future. As a result, you can meet financial and lifestyle changes that will keep you pushing toward your goals.
Before you start investing, you must consider your current situation. Review your finances and outgoings. See how much money you need to get by each month so you can continue to pay your mortgage or rent, put food on the table, cover your direct debits, and leave some for fun. You should then prioritize an emergency fund for yourself. Having a safety net is extremely beneficial. If you have outstanding debt, you should use a debt review calculator to help you better understand your situation and what you need to do to move forward. Efficiently dealing with your debt is a really important lifestyle change that will help you save money.
Understanding the Impact of Little Changes
We all feel accustomed to a specific way of life, and the hardest thing to do is to change these habits. But if you were to take a look at your life and focus on one bad habit in your life that costs you money and remove this, how much money would you save? It’s not unhealthy, but financially speaking, someone that has a cup of coffee every single day from their favorite barista can argue this is something they “need,” but these people need to calculate how much that one cup of coffee every day is costing over a year.
Making the assumption that picking up one cup of coffee on the way to the office costs $5, this means $25 a week, and if you worked 48 weeks out of the year, this means $1,200 on that one cup of coffee, $1,200 that you could invest or put into an emergency fund. $1,200 saved every single year from the age of 30 to the age of 60 equates to $36,000!
When we look at it like that, this one little habit that can disappear from our lives doesn’t just mean that we are saving more money, but we are invariably benefiting the quality of our lives as a result. You can still have that cup of coffee, but you could spend $5 on a cheaper brand that goes much further!
The Importance of Embedding a New Habit
When we think about building a new habit into our lives it can prove to be too much. We argue that we need the little expensive comforts in our lifestyle that make us feel good about ourselves. This is why we need to know how long it takes for a habit to embed. It can take 2 months for a new behavior to become automatic, and this is why lifestyle change needs to be given proper attention.
Remember that lifestyle changes are about improving the quality of our lives, and not necessarily feeling like we are emotionally starving ourselves. The problem is that we think that money is the solution to everything when it isn’t. If you need to be fit and healthy, you don’t need to invest in a home gym, you don’t even need to go to the gym! It might be a home away from home, and you are telling yourself this is your place that makes you feel sane, but there are ways for you to get the same benefits of socializing in the gym without actually spending $45 on a monthly membership! If you say you need the gym, you could pay a daily fee and head there once every few weeks.
A new habit is always going to take a while to settle in, whether it’s changing a part of a diet or exercise, but when we focus on saving money as a result, there comes a point when we think it’s too much to deal with, and we invariably fall back on old habits. But this is why we have to remember that anything new can be difficult, but it takes time.
Lifestyle changes are the best way to save money. There are investments that we make in life that can help in the long run, for example, a new car can save money because of the improved MPG, but if you are going to invest in a new car in a couple of years anyway, this is not going to benefit you in the long run. It’s far better to start thinking about what money truly brings to your life. The problem is that many people want to keep up with the Joneses- it’s far better to think about the quality of life rather than how much you can earn right here, right now. This is why lifestyle changes are a far more effective way to help you save money, but also ensure you appreciate the quality of life as a result. Money makes the world go round, but it isn’t everything.
