5 Financial Habits I Had to Change In Order to Save More Money
"Travel is possible for anyone, no matter your budget... Find cheap airfares and just go... Sleep in a hostel and have a dirt cheap budget surviving on boiled eggs..."
Yes, those are the quotes you hear on a daily basis (even from me -- I love boiled eggs) trying to convince you to travel more. It's not because we don't understand what you're going through (most of us have been in your shoes) it is because we see how much travel has changed our lives and want you to experience it too.
Whether finding love, purpose, a new job, good health, enlightenment, or plain ol' happiness -- people who travel often will agree that there is a special, sometimes inexplicable, reason why we are so obsessed with seeing the world.
What we don't talk about, though, is the one key that had to change first: our finances. I know it seems like travelers are rich, but most of us aren't making six figures a year (some not even five figures). We've just become particular about our coins. So I figured I can share some of my personal experiences while living in New York City as examples to help inspire you to save more money. This was even before I knew I wanted to travel full-time and have my own remote business.
Here are 5 financial decisions I made that helped me save money and travel more:
1. I cut Some friends loose
You don't think your friends can be a part of the problem because you have fun with them. But if you sat down and counted how much money you spend a week on friendship you'll realize it is A LOT. You're basically dating.
Think about it:
- You want to meet up with your BFF to talk about your latest dating escapade... "Let's meet up for [drinks]."
- You want to network and make new friends... "Let's go to [happy hour]."
- It is a friend's birthday... "I'm celebrating at [random club] and it'll only be a $15 cover if you say my name at the door."
- You are walking to the subway from work with your girl and see a sale sign... "OMG this is never on sale."
When I returned home after college I didn't have many local friends outside of coworkers. With varying upbringings, they all had unique spending habits. One of my colleagues loved shopping, another was a happy hour junkie, and the other -- obsessed with ordering daily breakfast and lunch at the desk.
I followed suit. I am not one for peer pressure but it became natural for me to want to "hang out". Even when I would make my own lunch, accompanying a coworker to get their lunch always resulted in me buying myself a fresh smoothie or a little snack for later -- I deserved it, right? It was like I lost control of my financial common sense.
I always convinced myself it was "Just $3.00".
Then one day I added it all up. I was spending about $300 a month on my friendships. $5-10 a day on snacks, drinks, and tips. A $20 meal here and there. A $20 pair of shoes because they were on sale. $15 for a happy hour meet up. $30 for a birthday party.
When I stopped hanging out as much with people who enjoyed spending money (I even changed jobs), HOLY BANK ACCOUNT -- I felt rich. About $300 richer, actually.
The effort was extreme at first. I didn't do anything unless it was free. But then I relaxed a bit and became more conscious about my decisions: I set a small budget for friendship and did more research about local free, cheap, and unique things to do in NYC that wouldn't break the bank.
I'm not saying don't have friends. Cherish the friends that you can have just as much fun with without emptying your bank account.
2. I started getting serious about my credit
I always had a decent credit score. But my last long-term relationship was also long distance. And while traveling across states wasn't expensive per trip, it certainly added up. The problem was it was the recession and I didn't actually have money.
I racked up credit card debt for love.
My debt to credit ratio worsened and even after getting a job, my new shopping / dining habits didn't help. So I opened a free Credit Karma account (no, this isn't sponsored) and started paying attention to my credit score and reports. I checked my account monthly while paying more than the card minimums and helped my credit usage get closer to the recommended 30% (it has been as high as 70%).
Disclaimer: it also helped that my relationship ended so I didn't need to spend money on weekend trips anymore.
Eventually I got a handle on my credit again and was able to apply for more credit cards. Not for shopping, though. This time I got point-based credit cards I could benefit from. I used these cards only if I had enough cash in the bank to pay off my bill and collected my points, which was basically used as cash in pocket (or statement credits).
I know you can't start saving money when you have tons of debt. But taking control of your score can help you negotiate better interest rates, apply for cards with much better benefits, and establish a responsible credit history for future business opportunities.
I'm not perfect, and with a self-employed gig I do resort to using my credit cards (especially for freelancing expenses), but I try to never let it get to that point again. I use my cards for their benefits now -- not a false salary.
3. I stopped living in a low-income apartment
You may be surprised to hear this but living in a low-income apartment at 25 years old (I qualified for it during the recession) had its downfalls (along with obvious financial benefits). While low-income programs are crucial for many struggling families and individuals, and was key in helping me get on my feet, it became a burden once I moved up professionally.
So how did moving help me financially? First you have to understand the whole story:
The problem with my first (beautiful and affordable) apartment was its location. My apartment was far from my friends and the neighborhood was dangerous to return to when I went out late at night (I had a total of five friends visit me in two years). I also had a new job that required late hours during high season.
As a result, I spent about $25 on homebound taxis anytime I worked late or went out (about 3 times a week). It didn't seem like much, and was a better option than taking the subway to the bus late in the evening, but it added up.
Almost $300 per month (obviously my magic number).
I was attached to my low-income deal, and knew I had a good situation, but my $750 rent plus taxi transportation equaled over $1,000 per month (not including utilities and misc. spending)! Which was about the cost of a studio in a more reasonable location.
I needed to let it go.
So I moved. I found a studio for $1,200 (out of time-sensitive desperation) and then moved again to a large shared apartment for about $950, which I eventually sublet for profit while traveling (easy to do living in a new "desirable" neighborhood).
Moving to a more expensive apartment ended up SAVING me money because I cut out taxis, didn't have to schedule "catch up" dates anymore (since my friends were right down the street), and wasn't shopping due to loneliness (break-up recovery too) or wanting to fit in.
4. I got into sales
Not a new job, though. When I say "sales" I mean, in my personal life. I stopped buying and started selling. I was selling EVERYTHING.
"You like my shoes? How much you want 'em for? I'll give you two of my purses for the price of one!"
I don't know what came over me but I was feeling really bummed about the fact that once I didn't want to spend money as much, some friends dropped like flies.
The remaining friends didn't care about my financial cutbacks and were happy to have apartment meet ups, go to free events, meet occasionally, and Netflix our lives away, but it sucked that some friends I loved proved to not give a crap (or maybe our friendship just wasn't fulfilling anymore / ran its course... and that's OK).
Once that happened though, my materialistic shackles broke away. I didn't realize that I was only wearing certain outfits because friends said I looked better that way. I suddenly had tons of pricey makeup and accessories and well...
WHO WAS I !?!?!?
Bye, bye, bye.
I suddenly couldn't care less about those things and sold my stuff on a weekly basis (no judgement if you DO care about those things, this just worked for me). I sold it to friends, sold it on Craigslist, sold it on Facebook. And like I mentioned in my last point, I eventually even sublet my furnished bedroom for profit years later.
5. I confronted my addiction
If you know me you know there is one addiction Livvy Liv struggles with: candy. Sugar addiction is REAL, y'all... and so are other addictions. I know plenty of people who cry about money yet still have enough to smoke, drink, and engage in other extracurricular addictive habits.
My addiction was sweets and I always found a way to make it to the bodega to get some sour candy no matter what.
But that's $1-2 everyday...
Which is $30-60 every month...
Oh, and diabetes.
Addiction can be EXPENSIVE and it was the most difficult habit I had to change. I had cold sweats, shakes and all. I am not exaggerating.
But I did it. I was able to stop overeating sweets and take control of my money.
Do you share any of these financial habits?
Friend routines, addiction, shopping, careless credit, daily expenses... what are the financial habits you feel are holding you back? My habits were costing me AT LEAST $1,000 a month. Paired with monthly bills, school loans, rent, and life -- I was living paycheck to paycheck with no opportunity to invest in my dreams. When I cut those habits even for just a few months out of the year, I saw big changes in my savings account.
I hate when people say "Don't drink Starbucks and you'll save money." I HATE COFFEE.
IT'S 👏 NOT 👏 JUST 👏 COFFEE.👏
Take a month to track your spending, you'll be surprised what financial habits are robbing you. With these five steps alone I saved thousands of dollars a year while working a full-time job and living in expensive New York City.
Share this post & start saving more money!
Share these five steps with your friends and family (or on social media) and get inspired to cut unnecessary expenditures so that you can save more money for travel.
xx Olivia Christine xx