🤔 What To Do About Our BIGGEST Spending Category

Happy Friday, friends!

While we’re deep within our no-spend month, it’s a great time to be examining our approach to money.

Cutting out the coffees and take-outs over the next few weeks will be helpful for our habit formation, impulse-spending, and savings jumpstart, but there are some bigger takeaways we want to highlight.

Last week, we talked about the 80/20 rule and the importance of focusing on the vital few of our finances so that we can enjoy and continue to leverage the useful many.

But what does this mean real-time? 🧐

We consider the Big 3 (housing, transportation, and food) to be the vital few.

Meaning these are the vital few categories that make up the majority of our monthly/annual expenses.

If we are able to steward these categories well, we will see a massive impact on our overall financial landscape. 

Specifically when it comes to housing, most of us spend between 20-30% of our income on this expense, that’s a BIG (albeit necessary) chunk of change!

This is why we think it’s more important to make a few wise decisions around our housing than it is to put too much focus on small weekly purchases.

This weekend, we encourage you to look at this category of spending with a posture of curiosity 💭 and creativity ✨.

Here are some prompts to consider depending on your housing situation:

RENTER 🏠

• What percentage of my income is being spent on monthly rent? Am I pleased with this ratio?

• Are there ways I can reduce my monthly living expenses? This can include reducing utilities and/or talking with my landlord about exchanging labor or maintenance for reduction in rent

• If necessary, would I consider renting smaller or in a less expensive neighborhood?

• In my experience, what are the pros and cons of renting?

HOPEFUL HOMEOWNER 🤞🏠

• What do I hope homeownership will provide for me?

• Regardless of what I’m pre-approved for, what am I comfortable spending monthly on my mortgage, property taxes, insurance, and utilities combined?

• Am I sure of the area I want to purchase in? Have I considered lower cost of living areas?

• Are there ways I can leverage my home purchase in order to reduce my living expenses? (i.e. would I rent out a room, or storage space?)

BONUS: If you’re early on in the process, check out Cashifyd for getting connected with lenders and agents that can help you get cash back on your home purchase (for free!) **

HOMEOWNER 👦🏠

• How much is my house actually costing me monthly? Is this different from what I anticipated or experienced in the past?

• How do I feel about home ownership? Are there additional emotional or relational costs beyond the mortgage?

• In my experience, what are the pros and cons of home ownership?

• Are there ways I can reduce my housing expenses? (i.e. putting more money towards the principle each month to reduce overall interest paid, renting a portion of the home, looking for rebates in my area/city for the home upgrades needed, etc.)

Catch ya later,

⭐️⭐️ P.S. Want to share all this goodness with your friends AND earn cool Frugal Friends merch?

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