By: Duann Cronje
Living comfortably shouldn't come at the cost of feeling financially strapped. Yet, many of us find ourselves caught in a cycle of rising expenses and stagnant incomes. The good news is that achieving a happy medium between affordability and quality of life is absolutely possible. It all boils down to a little introspection, strategic planning and a willingness to fine-tune your spending habits.
This four-step guide will equip you with the tools to not only lower your cost of living but also potentially improve your overall well-being.
Step 1: Dream big, but be real – envisioning your ideal life
Start by taking yourself on a mental vacation. Imagine your ideal day-to-day existence. What aspects of your current life bring you the most joy? Are there activities or experiences you yearn for but haven't prioritised due to cost? Jot down everything, from that daily cappuccino habit to that weekend getaway you've been putting off. This "realistic fantasy" serves as your roadmap – a vision board for the life you want to build.
Step 2: The reality check – a deep dive into your finances
Now, let's face the facts. Gather your bank statements and receipts from the past few months. It's time for a financial reconnaissance mission. Categorise your expenses ruthlessly. Be honest with yourself about where your money goes. Are there recurring subscriptions you barely use? Perhaps you're dining out more often than you realise. This deep dive will unveil areas where you can potentially cut back without sacrificing what truly matters.
Step 3: The 50% challenge – a test run for prioritisation
Here's a powerful exercise to expose wasteful spending: try living off 50% of your income for a month – allocate the remaining 50% towards savings and debt repayment (if any). This forces you to prioritise ruthlessly. Can you still afford that daily coffee? Maybe, but perhaps a cheaper alternative becomes more appealing. This experiment highlights where you can cut back without feeling deprived.
Step 4: Charting your course – building a sustainable lifestyle
Armed with your financial insights and a taste of a more frugal existence, it's time to design your new, improved life. Here's where you weave together the learnings from the previous steps. Look for ways to incorporate the aspects you value from your "realistic fantasy" into a more affordable framework. Can you replicate that weekend getaway experience with a staycation, complete with local adventures? Perhaps enjoying a home-made cappuccino becomes a more budget-friendly (and potentially tastier) ritual.
Remember, this isn't about deprivation; it's about smart allocation. By prioritising and eliminating wasteful spending, you free up resources for the things that truly matter. You might be surprised at how a more mindful approach to your finances unlocks a richer, more fulfilling life.
* Cronje is a financial planner at Fiscal Private Client Services.
PERSONAL FINANCE