One of the ways we recommend speeding up debt payoff and building wealth faster is to cut your expenses as much as possible. By using the Challenge Everything Budget, you can find ways to reduce or eliminate the money you spend on many everyday expenses.
For instance, you can call around to different insurance carriers to see if you can get a lower annual premium on car, life and homeowners insurance policies.
There are also ways you can save money on grocery purchases. By menu planning, avoiding the purchase of processed foods and shopping the sales you can cut your grocery budget significantly. Transportation costs is another budget area that you can reduce.
By combining trips you need to take with your car (i.e. stopping at the grocery store on the way home from work instead of making a separate trip), obeying speed limit laws, and keeping your car well maintained, you can save money on gas costs by using less. And if you put in a bit of time, you can even find ways to get free gas.
How to Challenge Everything
The point of the Challenge Everything budget is to take your existing budget, and challenge each expense, line by line. For instance, start by taking your car insurance payment, whether it be a monthly payment or an annual payment, and look for ways to get lower rates. Those lower rates might come by raising deductibles, decreasing coverage, or by switching to a different insurance company altogether. The goal is to get the expense as low as possible while still making sure your car insurance plan continues to protect you and those around you as you drive.
Next, you’ll move on to your grocery budget. Start researching and reading articles on how to save money on groceries. Then implement a meal plan and a spending budget that will allow you to cut your grocery bill and yet live on more than Ramen noodles every day. The goal, as J$ said, is to get the expense as low as possible without sacrificing (too much, anyway) quality of life.
The Benefits of the Challenge Everything Budget
The road to financial freedom requires a number of steps in most cases. Because lottery winnings or windfall inheritances are not likely for most wanting to attain wealth, you’ll have to follow certain steps in order to achieve financial independence. The first step is to eliminate debt. Interest paid on loans, credit cards and mortgages is interest that’s taken out of your pocket each and every month. Make a plan to pay off that debt and keep more money in your pocket.
What Can You NOT Spend?
Step two is to reduce expenses, and the Challenge Everything budget helps you do that, because it forces you to take a good, long look at each monthly expense, and determine whether or not that expense is of value to you and is in line with your goal to build wealth. The less in expenditures you have each and every month, the less money you’ll need each month in order to become financially independent. This is the beauty and strength behind the Challenge Everything budget. By confronting each and every expense you have, and looking for ways to eliminate or reduce that expense if it’s not bringing true value to your life, you free up more cash to put toward wealth building and financial independence goals, and you decrease the amount of money you’ll need each month to live on. By reducing monthly expenses, you have more money available to put toward step three of becoming financially independent: building wealth.