Fix These Top 10 Areas of Wasteful Spending to Reduce Debt and Build Wealth

BY: - 7 Sep '17 | Money

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When it comes to money, it seems we’re all wasteful. According to a recent Hloom poll, more than 8 out 10 Americans admit to squandering money. At the top of the list of wasteful spending is eating out, with 68.9% of survey participants admitting to spending too much money on meals away from home.

The US Department of Labor estimates the average US family spends nearly $3000 a year dining out. For the first time ever, the amount of money spent on meals outside the home has surpassed the amount of money we spend at home. Unfortunately, because restaurants mark-up their food by 200% to 300%, most American families waste between $1500 to $2000 a year eating away from home.

Those who truly understand the path to financial freedom, however, understand that it begins with the willingness to do what others won’t.

But why exactly is eliminating waste like this so important? As you know, my favorite formula for building wealth is:

Income – Expenses = Capital (seed money) left over to invest in wealth building assets.

Now, if you have significant debt, especially high interest debt (ie. credit cards), the formula should be modified to focus on paying off your debt before working on wealth creation:

Income – Expenses = Money left over to pay down debt

Either way, cutting out waste reduces the expenses side of the equation leaving more money for debt reduction or wealth creation.

Now, the fact that we waste money should come as no surprise. What is shocking is that the Hloom survey uncovered areas of wasteful spending that we admit to, but simply do not want to address.

Top Ten Wasteful Areas

1. Uneaten or expired food
2. Grocery items
3. Hobbies and activities
4. Entertainment expenses
5. Streaming services
6. Cable or digital TV
7. Cell phone services
8. Tech gadgets
9. Cars and gas
10. Bottled water

A family of four throws away between $1350 to $2275 worth of food each and every year? Simply by menu planning, monitoring your trash, using the FIFO system, and creatively using left-overs, you can instantly put more money in your pocket.

Likewise, becoming a better grocery shopper reaps huge dividends. Consider becoming a grocery store surfer, plan your meals around store sales, cut out impulse purchases and use coupons efficiently. In this way you can cut your grocery bills by as much as 30 to 40%.

Unfortunately, as the Hloom survey highlights, few people are willing to do this. Financial freedom may just not be that important to them.

Those who truly understand the path to financial freedom, however, understand that it begins with the willingness to do what others won’t. Jerry Rice once stated, “Today, I will do what others won’t so tomorrow I can do what others can’t.” By addressing your wasteful spending today, you’ll put yourself in a position to pay off debt and collect true wealth building assets in the future.

BMWK, are you willing to do what it takes to achieve financial freedom?

About the author

Alonzo Peters wrote 298 articles on this blog.

Alonzo Peters is founder of MochaMoney.com, a personal finance website dedicated to helping Black America achieve financial independence.

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Money and Marriage: 5 Financial Tips to Strengthen Your Relationship

BY: - 8 Sep '17 | Money

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By: Kyle Strozier

It’s been said that the number one cause of strife, arguments and eventual breakdowns in marriage is…money.  I’m sure we all know of personal accounts that will corroborate this.  I’m here to say, that needn’t be the case for you.

Marriage is a union of two people.  However, for many couples, that union stops immediately at money.  Here are a few tips to keep money from being a central cause of strife in your relationship.

Combine Your Finances

I counsel couples to combine their finances as soon as possible. This usually includes a joint checking account from which all bills are paid as well as a joint savings account (there are exceptions, but they are rare).  This scares quite a few people, but remember this thing called marriage is a union of two people.  There are a myriad of reasons for combining your finances. A major one is that “a house divided cannot stand.”

Make Bill Paying Decisions Together

In most relationships, one person is naturally more at ease handling the finances. This is normal.  However, I can’t tell you how many times I’ve seen people blindsided by reality. It’s usually the same response “I thought so and so was handling it.”  In short, both people should be involved with the money.  There are techniques to get both individuals up to speed on money matters but at a minimum you should discuss all current and future bills from time to time.

Communicate Financial Concerns Often

This is key.  Don’t be afraid to talk about money. Not talking about it can only make a situation worse.  You’ll find that after you get in the habit of discussing money with your significant other, it becomes somewhat uplifting as you both begin to recognize that you are a team working toward the same goals.  In fact, talking about money moves it from the realm of taboo and mystery to simply one topic among many that couples discuss.

Seek Advice from Reputable Individuals

There will come a time in your relationship when you and your spouse do not have the answer (retirement planning, business planning, college savings, etc).  Don’t be afraid to seek out a financial advisor.  More importantly, don’t wait until the last minute to do so. Most financial situations have a “right” answer so it’s better to do it “right” the first time.

Don’t Let Money Control You

How do you know if money controls you?  When you make financial decisions based on fear, anger, jealousy, spite, loathing, sadness, etc. These are clear signs that your money controls you.  As a married couple, you must use all of the tools available in order to make the relationship a success.  Recognize that money can be an instrumental tool but, if you don’t control it in the ways the I’ve outlined above, it will surely control you.

You can do this. Best of luck,

About the Author: Dr. Kyle Strozier, Founder of Wealth Matters Co., has worked in the finance field for 10 years.  His greatest accomplishments are those of a personal nature: assisting friends and family with “righting” their financial ship, teaching young people to manage their finances, and building financial stability for himself and his wife.  He possesses a deep, working knowledge of financial management that extends well beyond cash accounting and includes such items as Equity investing, options trading, bond analysis, retirement planning and strategic analysis.  You can learn more about him at  www.wealthmatters.co.

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BMWK Staff wrote 1241 articles on this blog.

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