The thing I like about money is that the math involved is very simple. It either goes up or goes down.
You can either increase your income, decrease your expenses, or change the time horizon for accomplishing your goal, but that’s it. Below you’ll find strategies and tactics for fighting inflation on a tight budget. These are the same frameworks that I've used in my own financial transformation journey.
Increase your income
- Promotions: Negotiate your salary with your current employer
- Job switch: See if you can get a higher salary with another employer in the same industry
- Gig economy: Instacart, TaskRabbit, Fiverr, Rover
- Sharing economy: Rent out a room, car, parking space
- Skills or services: Teaching or tutoring, offering services based on your skills
- Declutter: Sell unused stuff around the house
Decrease your expenses - Download your bank transactions, review each line, and ask yourself the following questions:
- Wants vs. Needs: Is this a true need, a want, a high priority want, or a want disguised as a ‘need’?
- Figure out and make a plan for your 'money triggers', the subconscious thoughts that can sometimes control your spending behaviors.
- Reframe:
- Be ruthless when defining something as a need; Reconsider your ‘default settings’ to recalibrate your mind.
- If it is not universally considered a need (even in third world countries), then perhaps it isn’t a true need, but rather a high priority want or luxury.
- Consolidate or downsize:
- Housing - Can you change your living situation by switching apartments, having a roommate, or renting out a room?
- Cars - Can you consolidate the number of cars you drive?
- Subscriptions - Can you cut unnecessary or duplicative services?
- Delete or Delay: Use what I call the ‘Delete or Delay’ strategy
- Delete - Am I even using this good or service? If not, or not enough, delete ex. Unused subscriptions
- Delay - Can I reduce my frequency of use? Can the time between uses or services be extended? Ex. Beauty appointments
- Free or alternative: Is there a free or lower cost alternative available? For example,
- Books → Library
- Gyms → In-home apps or equipment or outdoor activities
- Kids activities → Free activities, outdoor activities, visiting friends
- Clothing → Thifting, second-hand
- Food → Groceries vs. restaurants, meal kits vs. delivery, switch grocery stores
- Obtain two to three price quotes: Get two to three price quotes, especially for large, recurring expenses (but make sure to compare apples to apples and consider vendor quality)
- Insurances (property, auto)
- Utilities (phone, internet)
- Home services (pest control, cleaning)
- Change the payment terms or timing:
- Negotiate your bills or interest rates
- Use the snowball method to pay down debt and increase your cash flow
- Change the payment terms from monthly to quarterly or annual
- Embrace minimalism and intentionality:
- Clothing → Slow fashion vs fast fashion
- Home goods → Declutter, sell things around the house taking up space
- Shop with intention → Use virtual carts or lists to increase friction and reduce impulse buys
- Groceries → Look at your food inventory and prepare a meal plan and grocery list before heading to the grocery store so food is not wasted
- Embrace automation:
- Use budgeting apps for tracking your money
- Use apps like Rocket Money for canceling subscriptions
- Automate transactions to reduce friction when saving, investing, and paying down debt
- Take advantage of automated payment incentives
Visit MakingMoneyIsSimple.com to get started with a free consultation.