Americans are going broke; they just don’t know it yet.
Even though the government says we are not in a recession, everybody knows something is off. With wars & protests around the world, rising inflation, and the depressed real estate economy, all you have to do is look around and you’ll see there’s enough evidence that something isn’t right. Just look at the headlines:
According to the Department of Labor, in October 8.4 million people had multiple jobs just to cover costs.
Not only are people getting multiple jobs, American savings rates plummeted after COVID (see below).
It was also recently announced that credit card debt has reached a new high. Over $1 trillion dollars.
The truth is people are going broke and don’t want to admit it to themselves.
If you don’t tighten your belts or look at different ways to become more productive (i.e. make more money), you will be left in the dust. That’s why I’m going to give you some suggestions on what you can do during these strange economic times.
- Cut Spending
- Repay your Debt, the right way
- Increase your productivity
In this article, I’m going to go over 9 different things you can do to cut your spending. In the follow up article I’ll go over how to repay your debt, the right way, and how to increase your productivity.
9 Ways to Cut Spending
If your income hasn’t moved and your expenses have gone up, you must look at ways to cut costs. Here are some places that you can save:
1. Shop at lower-budget stores
Start shopping at discount stores – I know that you love Wholefoods & Sprouts, but you can get your organic pasta and lentils for a fraction of the cost at Trader Joe’s. Now is not the time to be boujie about where you’re shopping.
2. Substitute non-essential classes
Substitute classes – you may love your favorite Yoga instructor at Trufusion, but you can do without spending $150 / month. Instead, you can follow along on a YouTube video, or pay for an online Yoga Course for much less than what you’re paying at a Yoga studio.
3. Stop eating out
Stop Eating Out as Much – I don’t know about you, but eating out has become expensive. Lunch use to be $12-15 dollars, now it pushes close to $30 (and if you have a family with kids — forget about it, who wants to spend $150 every time you each lunch.) Starting cooking at home. If you don’t know how to cook, that’s fine. Neither did I until I started watching a ton of cooking YouTube video. Learn to make some of your favorite meals at home.
4. Shop cheaper insurance
Shop for Cheaper Insurance – in the last month, I have renegotiated my auto insurance and homeowners’ insurance. You can too. Don’t be afraid to call different insurance brokers to lower your yearly premiums.
5. Cancel subscriptions
You don’t need 54 online subscriptions to be happy – Just like me, you probably have a lot of online subscriptions. Time to go through your bank statements and cut out any subscriptions that aren’t necessary.
6. Balance transfers
Consider Balance Transfers on your Credit Cards – The average credit card interest rates are currently around 22.84%. Consider transferring your balance to a new credit card. Some credit agencies will allow you to transfer your balance for 3% and you may not have to pay interest for anywhere from 12-24 months.
7. Negotiate your rent
There is a lot of pressure on landlords because rent prices are declining. If your lease is almost up, you will want to consider negotiating your rent down. Normally rents go up, but because of the Airbnb bust, a lot of investors are moving there short-term Airbnb rentals into long term lease rentals. That means supply is going up, so the cost of rent is coming down. I had a friend of mine who was able to lease a home in Summerlin for $300 less than what the average going rent was a year ago. Now is the time to re-negotiate your rent.
8. Stop buying name brand stuff
I know that some of you believe that Lululemon is the only company that makes gym sweats or pants fit the right way. But do you really need to spend $200 on a long sleeve t-shirt? No you don’t. It may feel good, but you can get much cheaper gym gear online at places like Gymshark. Now is not the time to treat yourself to name brand stuff.
9. Skip the Starbucks
Unless Starbucks is your work office, there’s no need for you to be in a Starbucks to get a daily Frappuccino. It’s unhealthy for your wallet and also unhealthy for your body (530 calories if you get a venti). You can brew your own coffee at home.
Conclusion
I know it’s not fun making a budget and cutting costs. Keep in mind that this isn’t forever. America goes through cycles. And even though the next few years may be a cycle where you’re cutting costs, it doesn’t go on like this forever. In my next article I’m going to go over how to repay your debt, the right way, and how to increase your productivity.