Debt-Free Forever by Gail Vaz-Oxlade (the beginning after the end read novel .TXT) 📕

Strategy 6: Do the Math

A great motivation for swapping bad habits with good ones comes from figuring out what you’re saving a week by eliminating your bad habit. If you’ve decided to eliminate coffee on the road by substituting homemade coffee and you’re saving $20 a week, multiply that $20 by 52 (weeks in the year) to see how much you’ll save in a year. Find an online savings calculator, plug in your annual savings, a reasonable interest rate (say 3%), and the number of years until you retire. If you’re saving $80 a month and you’re 30 years old, eliminating that one bad habit will mean more than $60,000 in your pocket.

Smoking a pack of cigarettes a day eats up $3,650 a year, which is more than enough to provide your kids help for university or college. Sipping three bottles of moderately priced wine a week swallows $2,500, which is a pretty decent retirement savings deposit. Ordering in pizza a couple of times a week so you don’t have to cook after you finally get home from hockey or dance or karate with the kids will gobble $1,700 of your income, which is a good start to a fabulous family vacation. It’s easy to spend money on the conveniences and pleasures of life without giving it a second thought. Give it a second thought! Do the math and see what it’s actually costing you in terms of the dreams you would be able to make come true.

You don’t have to give up your pleasures completely. If you’re buying a fancy coffee a couple times a day and dropping $4.75 a pop, that’s $2,280 a year. Switch your caffeine dealer or sip smaller and send the rest to your emergency fund, which likely could use a boost. Lunches out are another way unconscious spending eats up money. A lunch entrée can run to $15. Add in a cold beverage and a cup of tea with the caramel praline cheesecake and you’re shelling out $30 with tax and tip. Do that three times a week and watch $4,500 a year go down the toilet, literally. Cut back to a once-a-week lunch out and not only will the outing be special because it’s less frequent, you’ll bank more than $3,000 a year.

GAIL’S TIPS

Pick something you buy without giving it a second thought and figure out what the long-term cost of your “small indulgence” is. Whether you’re a “bottle of wine a night” girl, a “magazine at the checkout” chick, or a “doodad at the automotive store” dude, add it up. Multiply it by 52 if you do it weekly, 250 if you do it every workday, or 365 if you do it daily. (Check out what it costs for a small spend like a newspaper done daily over 30 years and you’ll see what i mean.) Once you figure out what you’re spending in a year, multiply it by 30 to see what it’s costing you long-term.

The point isn’t to eliminate every small pleasure from your life. The point is to choose those pleasures consciously and, therefore, consciously enjoy them. If every sip of that beer brings you pleasure, and you can afford it, you’re doing fine. But if it’s your third bottle and you can’t remember the other two, well, kiddo, you got some consciousness raising to do.

Strategy 7: Look for Every Possible Way to Save

Your money is your money and you can spend it any way you please. But if you’re spending on credit, you’re not spending your money, you’re spending some other guy’s money, and you’re paying a whack of interest for the privilege. Shifting your mindset from Buy Now Pay Later to Plan Now Pay Cash is the difference between being a self-indulgent child and a responsible adult. Children may have a hard time deferring their immediate gratification, but as a grown-up you should have mastered this skill by now.

Finding the money to make planned spending a part of your money management isn’t as hard as most people think. It’s a matter of looking at where your money is going now and deciding whether that’s still working for you. If not, you can change what you’re doing.

Most people spend more on their insurance than they should. Insurance is yucky, after all, and having put it in place it’s easier to just keep paying whatever you agreed to and not think about it too much. Want to save some money? Most insurers offer a multi-vehicle discount, which can add up to 10% off both cars. Switch your home policy to the same insurer and save another 5%. Ask about age, low mileage, anti-theft, occupational and auto club discounts, all of which could save you money. And raise your deductibles to $1,000. Potential overall savings? About 35%, which could translate into $1,260 a year.

Are you still paying your mortgage monthly? Really? Where have you been? Everyone knows that by simply switching to an accelerated weekly payment you can save buckets of money. On a $300,000 mortgage at 8% amortized over 25 years, your savings would be more than $90,000 over the life of the mortgage. Wow! So easy.

How many hours a day do you spend watching TV? The average is about four hours, but most active people with busy lives get to the tube less frequently. If you’re not a couch potato, then the $100 a month you’re spending on the Ultimate Cable Package is a waste. Never mind having the whole world at your clicker-tips. Buy only what you watch. Spend half as much and you’ll have another $600 in savings.

Carrying a balance on your credit cards? About half of us do. And, sadly, many of us are unconscious enough not to know what it’s costing us. Time to get those statements out to see what we’re paying. More than 9.9%? With your terrific credit history, you should be getting a better