If you’re trying to save money, reduce your debt, and start funneling money into a retirement nest egg, at some point you’re going to have to get realistic about cutting out big costs from your budget. Obviously, there are some expenses that go with the territory. When it’s time to propose to your lovebird, a black diamond engagement ring is a more-than-acceptable use of your hard-earned money. But not everything on your credit card is so copacetic. Here are 4 big-money expenses you can do without:
New Car. Really? Your car runs fine, doesn’t stand out as a hoopty on the road, and has less than 100,000 miles on it, yet you feel you need a new one? It’s mind-boggling how much money people spend on new cars when their old ones run just fine. Car insurance is expensive enough, you don’t need to throw in a new chrome exterior as well. There will be a time and place for a new car. In the meantime, why don’t you spend that extra money refurbishing your old car and actually change the oil every 3,000 miles and align the tires? Better use of your money.
Entertainment Room. Isn’t this what a living room is? Entertainment rooms are just excuses to buy a bunch of expensive gadgets. If you want a 100-inch flat screen with Kinect and a five thousand dollar pool table, just admit it. Don’t act like you’re performing some altruistic act for your family—they’d benefit way more in the long run by having that money invested into their college funds, or a new kitchen!
Earthquake insurance. Some insurances make sense. Life insurance is a good bet (except for those expensive whole life plans), health insurance, fire, car—these are worth the money. But unless you’re living in Southern California, earthquake insurance deductibles can range up to $50,000 and you still have to make hefty monthly payments. Even if you live in a high-risk geographic region, often times earthquake insurance is a big cost with a dubious benefit.
Top rate university. I know, this one is controversial. I’m not saying you shouldn’t go to school or that you shouldn’t send your kids to school. I’m simply suggesting you look at the costs of some of the bigger schools and ask if it’s worth it. Many graduates aren’t finding work after college and are stuck paying monumental student loans. Solid internships may instantiate you into a well-paying career without having to sweat a degree and a decade of loan payments.
These costs run the gamut from entertainment to education to insurance and transportation. Life is full of expenditures and weighing the prices of the bigger ones is important in order to develop a nest egg for retirement.
This has been a guest post. I hope you enjoyed it!
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.