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In this video, Tasha shares some ways to save money by cutting out some lifestyle choices that waste money.


Should We Follow Dave Ramsey Baby Steps?:

One-Year Spending Plan:

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Hi. I'm Tasha from One Big Happy Life on behalf of the Financial Diet, and this is the lifestyle fix brought to you by Curiosity Stream. In today's video, I'm going to be sharing five lifestyle choices that are wasting your money.

Number one, not having a one year spending plan. Now a one year spending plan is what I call budgeting. Because I recommend budgeting, not by paycheck or by month, but budgeting for an entire year at a time. And why I recommend this is because when you're budgeting just by paycheck or just by month, you're not actually having a real, holistic view of what your finances look like over the course of a year. So if you have a trip coming up in 4 months, it's much harder to plan that when your budget only reflects just a single paycheck. Or if you know that you need to replace your tires every three years, and this is that year, you could plan for that with sinking funds in a one year spending plan. Now a lot of people hate the idea of budgeting generally, because they feel like budgeting is really restrictive or it's time consuming. But it doesn't have to be either one of those things. I look at budgeting/creating a spending plan as a way of deciding your financial priorities in advance. So if your priorities includes getting, for example, lash extensions, like I have right now, then you can put that in your spending plan so that you know that you are setting money aside for the things that truly matter to you. And you also know that you're setting money aside for the things that will help you build financial stability and grow your wealth in the long term. If you don't have a budget, what you're doing is relying on your own decision making right in the moment to choose to make the best choices for yourself without having any kind of plan in place. And for most people, that doesn't work out really well at all. So make sure that you have a spending plan so that you get to decide in advance where your money is going to go, what you're going to spend your money on, and where your financial priorities are so you're not wasting your money in the moment due to bad decisions because of decision fatigue.

Number two, paying off low interest debt before you've hit your minimum savings rate. Now I kind of want to expand this to say, paying off debt in general, especially rapid debt pay-off, when it causes you to compromise your savings goals and results in you having less wealth over the course of your lifetime. Here's the thing, I know that we live in a society, especially in the personal finance media, where you see a lot of people focusing on paying off debt, especially paying off debt quickly, given the amount of student loans that so many of us millennials come out of school with. But paying off debt, especially student loan debt, that's actually a short term financial goal. Everyone's biggest term financial goal is to build enough wealth over the course of your lifetime to have enough money saved so that you can retire when you want at the lifestyle that you want to have. And so, when you're making financial decisions, I strongly encourage you, especially when it comes to debt, to do the calculations. Understand how much your data is costing you, and understand, if you take that same bucket of money that you were going to put towards rapid debt pay off, and you instead invest it, and say, get your employer matching, how much wealthier will you be in the long run. And so, then you make your financial decisions in a way that optimizes your ability to build wealth and not that conforms to the media hype that you hear about debt being bad. The reality is that all debt isn't bad. The only debt that's bad is the debt that stops you from reaching your other financial goals when you want to hit it. But again, understand, that if you focus on rapid debt pay off it could have a really negative impact on your long term financial goals for building wealth. And so, for more information on exactly what that can look like with the calculations, a few years ago Joseph and I did a video on one big happy life where we showed what our net worth would look like if we followed Dave Ramsey's baby steps and did rapid debt payoff, and it resulted in millions of dollars in lost net worth. So I'll drop a link down below to that video so you can check that out, check out the graphs, the calculations, because you know I already spoiled it. But the results were shocking for many people. Because so many people assume that if you just do rapid debt pay off that you can then catch back up later by putting more money toward savings. But that isn't always the case.

Number three, living in a high cost of living area. Now I know that a lot of people feel inclined to live in a high cost of living area, either because they were born, there they grew up there, so they have their family and their friends there. Or because they feel that this is the only place where they'll have the job opportunities that they want to have. And while it is possible that you work in an industry where you don't have any choice but to live in a high cost of living area. Like if you want to work in movies or television or magazine print magazines, well chances are, you're going to be in LA or New York City. And so, that's true that you don't have much of a choice there. But I do encourage you to think really hard about the choices that you're making in terms of your career and where you choose to live. So for example, when we lived in Dallas, Texas, which is certainly not the absolute lowest cost of living place here in the United States, we had a four bedroom, three bath house that cost us $300,000. We had a 30 minute commute to work. It really wasn't bad at all, and the house was actually pretty big at almost 4,000 square feet. Now we live in the DC area. Our house is just under 2,500 square feet, and it cost us double what the house in Texas costs us. And yes, we are here in DC because of our jobs. Well, at least now, it's just Joseph's job, because I've worked full time for One Big Happy Life running my own company, which is awesome. But we are now ready to move to a lower cost of living area. We came here for a reason, for job opportunities. We got that experience, and now we're even more marketable than we were before. So right now we're looking at other lower cost alternatives to live here in the US that will give us the amenities that we're looking for. Like we like to make sure that there are good schools, and bike paths, and diversity. So we've got our short list of cities that we want to visit. And yes, what that means is we are willing to move to a city where we know absolutely no one, with children in tow, and build a life there. And it is entirely possible. We've done it over and over and over again, and so can you. So just understand that you're not trapped and not stuck living in that high cost of living area, and that your life can be better and easier, especially on the financial front, if you choose to move someplace that's a bit cheaper.

Number four, not cooking more of your meals at home. Eating out is incredibly expensive. And I know that learning how to manage cooking and having meals at home when you're working a full time job, and maybe also a side hustle, and perhaps, you're on the verge of having kids, it can be really difficult to find that balance. That's why we've made videos here on the Financial Diet, as well as over on One Big Happy Life, to get you started with meal prepping. Now for my family of four, we could easily spend $100 on a meal out, which is a lot of money. That is at least a third of what our grocery budget would be if we were eating at home. And so, learning how to meal prep has been just a lifesaver for us. So here's what's involved with meal prepping. All you have to do is decide the number of meals that you want to have, the frequency with which you're willing to eat the same meal, because some people want to eat something different every single day. And you just plan your menu in advance, and do your grocery shopping so that you have all of those staples available for you during the week when you're ready to eat them. Now if you find that you aren't willing to do the cooking, like you get home, all the food is there for you to prep, but you don't want to do all of that. So then, you end up eating out, then I recommend going ahead and meal prepping your food once or twice a week. If you do it once a week, you can throw things in the freezer so that they microwave and they reheat just as well. Or if you're doing a lot of fresh produce salads, then you'll want to do something, do a meal prep session on Sunday, and then again on Wednesday. So the goal here is to first find, say 10 recipes, 10 great recipes that you absolutely love. So week after week, try one or two new recipes. And then, you'll find that you'll get better and better at cooking. You'll get faster at cooking. You'll fall in love with the foods that you're making at home, and you'll start eating out less and less, which will end up saving you hundreds or thousands of dollars every single year.

Number five, status symbol purchases. Now I am all about spending in accordance with your financial priorities. So if you love yourself a designer bag, because you love the construction or what have you, then, by all means, have at it as long as you're not sacrificing your other financial goals. But I hear a lot of people saying they need to dress the role or look the part. And you also, there's no denying that there is often an urge to keep up with what other people around us are doing, which then causes us to buy things that we wouldn't normally buy, like designer bags or higher end, dry clean only suits, or things like designer cars. So luxury vehicles like BMW's, Mercedes, even Starbucks is a status symbol purchase. And so, before you indulge in those things, I encourage you to just take a step back, and really think about what's important to you in life. What are your values? What do you want your life to look like? So for me, when I became a lawyer, wearing suits, that was just par for the course. And I absolutely hate suits. I hate suits. I hate dress pants. So I just decided, I'm not going to wear those things unless I absolutely have to. So when you go to court, there's no getting around wearing a suit in court. But outside of court, I made sure to dress as comfortably as I possibly could. So that meant, I ignored purchases that I felt like would make me fit in better at work. And instead, looked for things that got me close enough, but really were more in accordance with my own style. And I also decided that basically any place that wouldn't promote me because I didn't dress the way they felt like I should be dressing is not a place that would be best for my long term success anyway. Similarly, any people that are only impressed by how you present yourself externally with designer items and brand names, well, you have to ask yourself, are those the people that you really want to be impressing? Are those the people that will allow you to build long-term, strong, and true friendships? And the answer is, probably not. So just be careful with the status symbol purchases, and resist the urge. Make sure that you're purchasing them for the right reasons, and not just to impress others.

So now that we've talked about five things that you shouldn't be wasting your money on, let's talk about a great place to learn more about the world around you. Special thanks to Curiosity Stream for sponsoring today's video. If you were told you could get fit with just a few minutes of exercise a week, would you believe it? That's the question researchers were tackling in a recent documentary short that I watched on Curiosity Stream. I'll drop a link in the description box to the episode so you can check it out. Curiosity Stream is a subscription streaming service made for those of you who have no shame in your nerd game. With over 2,400 documentaries and non-fiction titles from some of the world's best filmmakers, including exclusive originals, Curiosity Stream is the world's first streaming service that focuses on our lifelong quest to learn, explore, and understand. Curiosity Stream is offering a special promotion just for TFD viewers. Get your first 30 days completely free if you sign up using the link and promo code in the description box during the sign-up process. Thank you so much for watching. Be sure to subscribe and hit that notification bell, and tune in here every single Friday for another new episode of The Lifestyle Fix. See you next week.