If investing seems like a far off goal that gets paired with phrases like “later on” and “someday”, don’t feel bad. You are not alone. But fortunate for you (and the rest of us for that matter), there are ways to turn that once unattainable goal of investing into something manageable that you can start now. The most important thing to remember when finding money to invest in a budget is to be open-minded and a little creative. Being resourceful can be fun and put you further ahead than you may have thought.
Lookout for “lifestyle creep”
The term “lifestyle creep” basically describes the tendency for one’s spending to increase in line with their income. So when you get a raise, somehow that money seems to be spent on an additional “expense” and then disappear. Typically these “needs” are not really needed at all, even when they feel that way. Take care to look over your written budget carefully month after month. Identify whether anything has made its way into your budget that is unnecessary and is getting in the way of your saving or investing goals. This doesn’t even need to be a new item in the budget- it may just be that you are purchasing more expensive items of the same type. Maybe instead of the minimum cell phone plan, you upgraded to a higher level? Or increasing your cable package? Or started buying the gourmet cheese instead of the more basic variety? There is nothing wrong with treating yourself, just make sure you are not derailing your future goals by not saving or investing in favor of cheese and the like.
- Get cosy with substitution
Everyone’s favourite example- coffee. Do you find yourself stopping out of convenience at a coffee chain to pick up your regular drip on the way to work? Believe it or not, it’s not convenient to drive to a coffee shop, wait in line, order, wait for pickup, and then get on to your next destination. Why not just make a one-time purchase of a coffee maker you can set a timer on so your coffee brews while you get ready? Set it up the night before and voila! For the most savings, you can use washable, reusable travel mugs. Forget to wash your to go mugs and feeling a little, well, lazy? Try buying bulk paper coffee cups at your local food warehouse. For around 10 bucks (or less on sale) you can get 50 cups. Buy coffee when it goes on sale to add to your savings. Going this route saves at LEAST half (and can be pennies on the dollar) comparatively. Can this substitution method be used elsewhere? Absolutely. Let your creativity out to play with any regular expense you have. Rule of thumb- a convenience that is sold to you costs way more.
- Make your own
Use this motto regularly and reap the rewards. Make your own house cleaning products. You can find great recipes online and again, spend pennies on the dollar for healthier products. Grow a small garden and eat healthier, fresher food- for free! Minus dirt, seeds, and water of course. Again, you can find online resources for everything from veggies in the window sill to elaborate outdoor gardens. You have a window in your place, right? Get creative with items you own. Can you repurpose an old cabinet into a cat box? From personal experience, this is awesome. Without spending over $150 for a cat cabinet to hold the cat box and cut down on odors and ugly litter, find a tutorial on making your own out of free or cheap furniture and still reap all the benefits of a less stinky house. Once you start making your items, you will learn what is worth it and what isn’t. Sometime investments don’t make sense, but there are a ton that do. And bonus- the homemade products tend to be healthier and contain fewer chemicals than those that are store bought.
The name of the game is creating a bigger gap between what you bring home and what you spend. Everything in between making and spending equals savings. Become an active participant in your savings and watch your finances transform!