A key aspect of getting financially free, is to become ruthless in your prioritization of what really matters. How badly do you want to be free? How badly do you want that latte or that new dress?
If you’re early in your career or earnings journey, your sacrifices and tradeoffs will likely be larger because there is less excess to save, so you’ll have to be creative to create room in your budget to allow for a higher saving rate (remember, a high savings rate is crucial to getting free).
Some things that helped me save $25k in about 3 years while making less than $40,000/year while living in Manhattan:
- Set fun and food budgets in cash. Back in the early 2000s, I gave myself a budget of $60/week for fun and food. I would take it out in cash at the beginning of the week and allowed myself the freedom to spend it however I wanted, but when it was gone, it was gone – no more fun, no more food. It sounds harsh but it worked!
- Cook or learn to cook: I taught myself to cook all of my favorite dishes so that I could eat what I wanted without going to pricey NYC restaurants. God bless my friends who sat through my early efforts to perfect lasagna and other dishes!
- Cook strategically: Make a list of the cheapest, healthiest, most filling dishes you know how to make and create a rotating menu. For me those things were things like tacos, lasagna, spaghetti and other past dishes, jambalya, chili, loaded baked potatoes, and breakfast for dinner.
- Shop by list and menu only: Choose 1-2 dishes you’ll make for the week and then make a list of all the ingredients needed for those dishes. Only buy those ingredients on your list. Avoid items like cookies, sodas, and chips – they are extra calories and expenses you don’t need!
- Be intentional about fun and discretionary spending: even though I was on a tight budget, I still managed to go out with friends multiple times per week and even get my hair done regularly. How? by planning ahead…women usually get into NYC clubs and bars for free, so my friends and I made it a point to only go places without cover charges. I only went out during Happy Hour and only bought what was on special. I was generous with accepting dates and free drinks when offered 😉 The Dominican hair salon across the street from my house offered a $10 wash and blow out special on Mondays, so guess when I got my hair done? Yep, on Mondays.
Freelennial 