Expenses Cost More than Money - They Cost Your Freedom
If you've ever had one of those days where you want to tell your boss to 'take this job and shove it,' you may also have felt trapped in your job due to your financial situation. You're not alone.
A glimpse into Kelly Ripa's personal and professional life shows why budgeting and controlling your expenses is so important in your life. Apparently, Ripa is trapped in her job too, even though she makes a reported $15 million a year.
Last week it was widely reported that Kelly Ripa is furious about her co-host, Michael Strahan, leaving and going to another morning show. Aside from the personal issues, it is also reported that she felt blindsided and wasn't consulted or informed about the move in advance. But after being absent from work for a few days, she was right back at the show. TMZ speculated that although she makes millions of dollars a year, she had to return to work since she and her husband spend those same millions of dollars each year.
Tabloid BS aside, the story is pointed commentary on the average person's finances even if Ripa's celebrity and income make her decidedly not average. Those that also find themselves spending all, or nearly all, of their money each month will also find themselves trapped in their jobs.
REclaim Your Freedom
Fix it. If you feel trapped at work because taking a little time off would have you worrying about how to make the rent or mortgage, here are some specific steps to ease the financial pressure. None of these will be revolutionary, but maybe the idea of having even a little freedom from your job will be the motivation needed to implement them.
Cut Expenses Back
Find ways to cut back on or eliminate expenses. Even little changes in expenses can be big if you have a bunch that add up. Look at everything you spend money on and evaluate if you can cut back. Dropping your internet connection down to the next lower level may only save you $15 a month; but if you find 10 little things like that, you'll save thousands of dollars each year.
The more you minimize your monthly expenses, the more financial breathing room you will have. Not only will this make it easier to handle small pauses in your income, but it will make it easier to do the next two steps.
Kill Consumer Debt
Debt is the current cost of past decisions. And although the past decisions may have been fun, the current and future debt payments probably aren't. As you may know, I am not against debt. But the more debt you have the harder it is to leave your job. Take all that extra money you saved from cutting back and dump it into killing off high-interest debt, especially credit card debt.
As you pay off your debt, not only will you be saving on the monthly principle payments, but you'll stop giving all that interest money to the banks too.
Build an Emergency Fund
It seems so simple, yet so few people save each month. Having a steady flow of money going toward savings is the most powerful thing you can do to give yourself some freedom. After you pay down your high-interest debt, drop all that money into savings until you have at least three to six months of expenses in savings.
Think about how freeing it would be to know you could pay your expenses for months from your emergency fund. Heck, you can even call the account your 'F.U. fund' if you like.
Take the Purposeful Finance Challenge
In just a few minutes a week, you can move toward financial independence. Each week you will receive a simple action item to take to improve your financial situation. Visit our challenge page and commit to build your financial plan one week at a time.