Sometimes the most remarkable pushback I get from people in slowing their lifestyle creep is what other people might think. Let\’s address that first-hand.
When I decided to address my debt and pay it off over two years, I took drastic measures. However, if you\’re well-established in your community, want to keep your kids in the same school, or maintain that effortless commute, then you may consider taking an entirely different approach. The method I would suggest is a seven-step process:
- Real estate: Often, we don\’t realize how much space we are taking up with our clutter. We may have an extra office at the local co-working space, or we may have our seasonal sports equipment in a storage unit or a pod waiting to be organized. You may have an RV in storage, an unused pool house, frog, casita, or perhaps even untouched guest quarters. Evaluate the stuff that you keep around \”just because.\” See if there is an opportunity to pair down, clean up, and eliminate unnecessary costs. You could even use that extra space as a VRBO or Airbnb side hustle—you never know!
- Sell extra vehicles (4-wheelers, boats, planes, trains, and automobiles… haha). Many of us have excess when it comes to machines that we then have to spend time, energy, and resources to upkeep. Look at what vehicles may be costing you more to maintain than they are worth. See how you may be able to consign them or use a free listing service (like Facebook Marketplace) to get rid of your things.
- Cancel subscriptions (Netflix, cable, hotspots, online memberships, club memberships, food delivery, etc.). Subscriptions for food, entertainment, apparel, and the like can be a \”set it and forget it.\” We often have no idea how much that subscription is costing us that we never use.
- Limit the number of times you eat out per week, and more importantly, where you eat out. I have to be really careful about this area. How often can we settle for convenience without seeing the effect of that daily $6 latte or that meal from the drive-thru?
- Prolong large purchases and buy used. Our need for instant gratification doesn\’t allow us to save up for things. We finance everything. But holding off on a new pool, a kitchen renovation, or buying a used patio set can give you some breathing room while you plan for what\’s the highest priority to you.
- Buy slightly used instead of brand new vehicles to avoid the depreciation curve.
- \”Your car\’s value decreases around 20% to 30% by the end of the first year. From years two to six, depreciation ranges from 15% to 18% per year, according to recent data from Black Book, which tracks used-car pricing. As a rule of thumb, in five years, cars lose 60% or more of their initial value.\”
- We will discuss transportation hacks in-depth in a coming theme, but this is an area that may be an easy win as you wait for that high-profile vehicle for a little longer than you normally would. Your neighbors or family wouldn\’t notice the difference anyway.
- Renegotiate insurance policies, life insurance, phone bills, cable bills. Although some of these items could fall under subscriptions, many forget to shop around for the best insurance policies for your home, renters, auto, disability, and care, as well as aspects like life insurance.
I organized [Margin] to take you through a year-long financial overhaul. There is a process for your money that I call \”The Triple-A: Audit, Automate, Augment.\” We\’re in the first phase of auditing and reviewing your debt. Evaluate what kind of debt you\’re in, being sure to take a look at the big picture of your unsecured debt. Click here to find out about the Margin Membership.
