By Mary Hunt
You need more money, and you need it now. What are you choices? You have two: You can increase your income, or you can reduce your spending.
There are several ways to increase your income:
Get a bigger paycheck. Ask for a raise; land a new job that pays a lot more; or get a second (or third) job to supplement your income.
Win the lottery. Keep in mind when considering this option that your chances of being struck by lightning are much higher than your chances of winning the lottery.
Sell your assets. Find a cash buyer for your grandmother’s sterling silver, your boat or some other asset.
All of these are ways for you to increase your income and improve your financial picture. But let’s get real: If you could do any of these things, you would have done so already, and we wouldn’t be having this conversation.
While increasing your income is a way to change your financial picture in theory, it is not always easy or effective. More income means higher taxes and increased work-related expenses. And it does nothing to address old habits of overspending and incurring too much debt.
Your second option to change your financial situation is to reduce spending.
Unless you are living below the poverty line, I am confident you can reduce your expenditures without compromising your standard of living.
Target every area. The secret is to look at every area of spending and reduce it a little bit. It all adds up!
Instantaneous. When you reduce your expenses, the effect is instantaneous. The money you don’t spend remains in your pocket. It’s your money, and it has already been taxed. Every expense you have is a candidate for some type of systematic reduction.
Less stress. Reducing your expenses forces you to focus on what really matters. You begin to notice unneeded baggage, and you’re more willing to acknowledge what brings you joy, what needs to go and how to create the life you love.
More contentment. Throwing conspicuous consumption into reverse has a calming effect on both adults and kids. Overindulging complicates life and causes much stress.
The key to achieving financial freedom is to spend less than you earn. It takes desire and commitment to live below your means without giving up your style and your quality of life.
Don’t worry that you’re going to lose your dignity. In fact, no one needs to know about your new resolve to find ways to drastically cut your expenses. You don’t have to print “I’m Cheap!” on your forehead. A better option is to engrave this motto in your mind: Wherever I am, whatever I do, there is a way to do it for less.
Mary invites questions, comments and tips at email@example.com, or c/o Everyday Cheapskate, 12340 Seal Beach Blvd., Suite B-416, Seal Beach, CA 90740. This column will answer questions of general interest, but letters cannot be answered individually