Frugality as The Best Approach To Become Debt Free
Frugality as a means to cope up with your debt payments isn’t new to everyone. This proposition is made famous by David Bach and is referred to as the latte factor which is a strategy of saving money from the tiny things or what is referred to as daily lattes.
In a logical sense, there are several daily expenses that may seem small and we seldom take for granted in spending. As you take a look at these expenses over time, these can sum up to a huge amount of money that you are spending without knowing.
Does That Coffee Really Cost You Much?
Putting into perspective that you normally buy your coffee for $3.50 at Starbucks. Let’s say, you regularly get one on a daily basis on your way to work. Now, considering you’re working 5 days in a week, you’re coffee expenses alone can sum up to $17.50. As you try to take a look at this amount in a year, it will sum up to $910, which is already a significant amount when totaled over the period. For instance, in 10 years’ time, it can cost you $9,100.
Moreover, you should know that there are things that we unaware of spending a significant cost. Learning how to cut back on your expenses is a great way to attain financial stability. What you really need is to recognize the things that you can live without and the things that you need.
Should You Quit Drinking Coffee?
Some people though have taken Bach’s words literally, what he really wants to convey is the attitude of being conscious towards spending. You have to make sure that every dollar is spent wisely. By being on top of where your money goes, you can potentially save great amounts over time. Besides, this is a proposition that can also be viewed in terms of spender or saver attitude.
Moreover, you have to think if you are spending on things that you really need. In most cases, there are several things that we really don’t need or we can live without. say for instance, instead of buying a fancy coffee, you can actually brew yourself before leaving for work. In fact, knowing the ways to propel yourself are also useful to develop this kind of attitude.
Let’s say, you just can’t quit on buying a fancy cup of coffee, those times that you’re free might be utilized in doing something where you can earn extra. By doing so, you don’t have to sacrifice your usual means of living and can even possibly increase your income.
Decide Your Latte Factor
So, in instances that you’ve considered coffee as something that you don’t want to cut back, there wouldn’t be a problem. But, you will have to decide on your latte factor. This means you have to scrutinize everything in your expenses and check for the things that you can eliminate or live without. In creating a budget, it is a must that you write down all your expenses may it be small or insignificant as you think.
You can even find out what stuff you can get at a dollar store to save money on expenses. The bottom line is to determine all other expenses that you can cancel or reduced for you to save more money. The key is you have to make sure that every penny is valued and spent wisely.
Will Frugality Make You Wealthy?
For someone who has been cutting back expenses, it forces more motivation and enthusiasm, especially when you get to pay off your debt. However, you may tend to incline more on cutting back your expenses, which sometimes lead to consuming most of your time. Instead, you can use your time in an income-generating activity that can add up to your income.
In cutting back your expenses and determining your latte factor, it is a must that you also consider the cost of time that will be taken from you by doing so. For instance, walking to work which can take you 30 minutes rather than taking a bus for $2; consider the time it will cost when making this kind of decision.
Time is Money
To get a clear picture, let’s take your walking towards works over getting a bus as a concrete example. If it takes you 5 minutes to work when taking a bus, you’ll get to have 25 minutes of spare time. So, just ponder on what you could have done within 25 minutes. Taking for instance, that your job can pay you more than $2 for working an extra 25 minutes; you an save more money if you take a bus for $2 rather than walking.
Another means would be using your spare time for your freelancing job or sideline; this can potentially increase your income and save more money as you get to free up most of your time. Hence, to better decide on your latte factor, you also have to consider the cost of your time to weigh your options better.
Areas Where You Can Be Frugal
The Viewpoint of Frugality
Frugality is just an initial step to gain control of your income and spending. It is a way to help you manage your debt and your finances. Considering the attitude of being frugal, compels you to focus even on the small bites of your expenses. Moreover, is an effective strategy that you can adapt to put your budget plan in place.
However, you shouldn’t settle on this alone. It is always favorable for someone to attain big wins to build stable finance. Acquiring new skills that will help you fill new roles and a second job can also be an efficient strategy to be totally debt-free. In your journey towards knocking down your debts, these ways are one of the most feasible solutions that you can consider.
In contrast, when it’s too much to bear, always know that help is always available. You can seek debt relief alternatives that is suitable for you. Additionally, debt management for Canadians is widely accessible. All you need is to SEE IF YOU QUALIFY.
CONSUMER PROPOSAL EXAMPLE
Example Unsecured Debts
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Your Monthly Repayments Would Be
a Consumer proposal $748
(total contractual repayments)
a Consumer proposal $295
(total contractual repayments)
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