Almost every day, I hear someone say, “It’s going to be tight this month,” or, “I wish my money could go further!” When we live paycheck to paycheck or with no money leftover at the end of each month, we have no financial margin. We don’t have total control over how much we make, but we control how much we spend and what we spend that hard-earned money on.
Simply put, financial margin gives us more options. Financial stress and worry is the only long-term option available without financial margin, no matter how much we make. These are significant changes that make a huge difference.
The great news is that financial margin is available and attainable to everyone regardless of your budget! Not saying that it will be easy, but great things very rarely are. But if we are purposeful and committed to our goal of financial margin, we will get there. Here are ten practical steps to get there as quick as possible.
1) Get A Financial Plan
The importance of a financial plan can not be understated. Without a plan, you may think you have margin, but in reality, you do not. A great financial plan will consider your goals and preferences and give you a strategy today that grows with you in the future.
Check out this article for Financial Planning 101 for more information.
2) Make a Budget
The easiest way to create more margin… Budgeting! It is incredible how much money slips out of your pocket without a budget; let’s add that to the bottom line instead! It will feel like a raise once you get the hang of it.
Not sure where to start when it comes to budgeting? Check out this article on making a budget your new best friend!
3) Downsize Your Home
Your most significant expense is typically your home, and so naturally, it is a place to look at when cutting expenses. A good rule of thumb is if your house payment is more than 25% of your income, you are sacrificing margin for a home you really can’t afford. Sacrificing today will lead to better outcomes tomorrow.
4) Create A Side Income
With the internet, there are so many ways to create a little extra cash each month, from taking surveys to teaching classes and a whole lot in between. Finding something that you can add to your bottom line makes a difference!
There are numerous ways to make a little extra on the side with a bit of research and creativity and maybe even replace your 9-5 in the process.
Check out my favorite Side Hustles for 2022 here!
5) Reduce Transportation Costs
The moment you drive your car, bike, boat, really anything with a motor, off the lot, it is losing value. Not to mention the maintenance cost and payments you have on them can eat into your margin. Having money tied into things that go down in value is not a great way to create margin, so think about downsizing, public transport, or maybe renting out your vehicle on a site like Toro to make these costs more manageable.
6) Track Your Subscriptions
Subscriptions can be the straws that break the camel’s back. Netflix, Cable, HBO, Disney +, Spotify, apple tv, pandora, amazon prime, the list goes on and on. Take a hard look at these and see what can be eliminated and substituted to a free version. My personal favorite free alternative for music is youtube. You can save and share playlists and even watch some movies and tv for free on their platform!
7) Do It Yourself
Luxury is often just that.. luxury. Are you buying coffee from Starbucks every day? Maybe it’s time to make your own. Are you paying for yard service, house cleaning, pest control, or errand running? It might be time to roll up the sleeves, get a little dirty, and see what you can do without sending your hard-earned money out the window.
8) Check Insurance Options
Insurance can be confusing, and there is an excellent chance you are overpaying. Policygenius is an insurance marketplace that helps users find and compare insurance easily. Being an independent insurance broker, they offer a wide range of insurance products, such as life insurance, home insurance, auto insurance, and many others.
Their payout for life insurance is the highest among all insurance types on their platform. Take a look at their free comparing tools and get the best rate possible!
9) Shop In Bulk
If you are strategic about when you shop and what you are shopping for, buying in bulk is an easy way to add to your margin! Coupons and shopping in bulk can make your grocery budget go further! Costco and Sam’s club often have deals that make their membership practically free, and you get access to great deals.
10) Rethink Entertainment
Eating out, going to the movies, whatever your guilty pleasure is, these can eat into your budget. If you strategize and plan your entertainment, there are ways you can really save and still have a fantastic time; sometimes, it just requires a little more thought. Museums, parks, lakes, farmer’s markets, there are a number of free things to do. It may take some good ole fashion googling to find some in your area.
I know these changes can feel daunting and maybe even unrealistic. Start with focusing on one thing you can do this month to create financial margin. Just being aware of your situation gives you the power to change it. There is so much more freedom available to you, and it all starts with creating margin. You are not alone in this journey, and I would highly recommend getting someone to walk through this journey with you.
As always, you got this!
Great practical, usable advice! What are your thoughts about how to pray about money? Is it okay to pray for (more) money? To win the lottery?