Financial stress is the usual reason why many people are anxious and depressed. Money issues can make it hard for someone to stay happy and healthy. Getting more sources of income can indeed help reduce your financial stress. But if there is one thing that can help improve your financial situation, that is to live a life below your means.
Downsizing your life is the most practical way to achieve such a financial goal. You will soon realize that there is joy in finding happiness in simple things. You can start fulfilling your dreams of saving for your future and live a life with less financial distress.
The problem is, it is never easy to live a simple lifestyle. It takes a lot of dedication of hard work to say goodbye to the life you have come to love. If you are serious about simplifying your life, here are five habits worth adopting.
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Dedicate Your Time Trimming Your Expenses
Many people managed to increase their income but still suffer from massive debts and a lack of savings. The usual reason is that their debts and expenses grow along with their income. Dedicating your time to trimming your expenses will help ensure the thing that is growing along with your income is the amount in your savings account.
Evaluate your needs and create a list of everything you pay for each month. Then, eliminate the expenses you don’t have an actual need or use for. This could be a subscription to a movie streaming service you rarely use or that gym membership you don’t even utilize.
Next, learn how you can reduce, if not eliminate, your biggest expense. More often than not, this could be monthly rent or your mortgage. Consider moving to new housing that can fit your lifestyle and spatial needs but is considerably cheaper than your current one.
If you are still paying for a mortgage, assess if refinancing your mortgage loan makes sense. Will it reduce your monthly interest rate and mortgage fees, shorten your loan term, or enable you to build more equity? Then refinancing could be your best choice in reducing your mortgage.
Reconsider Your Activities
One downsizing tip worth considering is rethinking the activities you engage in and choosing the cheaper version. Many of us would drop by our favorite coffee shops to get a five-dollar coffee. Others like the idea of exercising at the gym and have to pay for gym memberships even if they work out regularly.
Analyzing your activities will help you save more money while still enabling yourself to accomplish your tasks. If you are not sure what activities you can downsize, here are some examples.
- Skip the gym workouts and exercise at home.
- Bring your own brewed coffee to work or choose local or mom-and-pop coffeehouses.
- Walk or use a bike to go to the park instead of riding your car.
- Using public transport or join a carpool with friends.
- Consider backpacking and camping instead of paying for hotels when traveling.
- Choose to eat local cuisines instead of visiting high-end restaurants in tourist destinations.
- Explore different recipes at home instead of eating out.
- Visit the library or buy second-hand books instead of buying new ones.
- Grow your own local produce instead of buying from the supermarket.
Move to Smaller House
Moving houses is never easy. But if you can find something cheaper, fit your stuff, match your lifestyle, and be near your go-to places like the supermarket and work, consider this option. Sometimes, reducing your housing expenses is the best way to drastically downsize your lifestyle.
A smaller home will make you reconsider your buying habits. The smaller the house, the lower your taxes and home maintenance expenses will usually be. If you can reduce your utility bills, this can also help you save more cash for your future.
Before moving, it makes sense to reduce the number of your belongings. Separate your needs and essentials with your nice-to-haves and wants. Donate, sell, or give it away to strangers before the big move so you can start anew.
If moving is not an option, find ways to make money out of your home. You can consider finding a roommate or hosting professional travelers. You can also rent out your extra space, like your garage or your yard.
Downsizing can be tricky if all you know is how to start. You should also dedicate your time adapting habits the will make it easier to retain such a lifestyle. By downsizing your life, you are paving the way for a more financially secure future.