How to Make Money by Doing Less
How many times have you sat around a table at a bar or café with friends, enjoyed a nice coffee or beer and pondered on how to get rich? Everyone has had those brainstorming moments, discussing business propositions, get rich quick schemes and stories they have heard of successful friends. Now, you could look at these moments as necessary planning stages as you got to get the motivation and idea on how to make money somewhere. But having these planning moments every week and not taking action on them is setting you back even further. Needless spending on items such as food, dips into your funds and slows down your savings. You need money to make money! So eliminating the habit of unnecessary spending is a great way to start your journey for a prosperous future.
Convert Money to TimeWhen you go to a bar, you might find yourself spending $8 for a single beer, converting that $8 into time can be a great way to inform us of the repercussions of our spending. If we take the minimum wage of $16.50 per hour for example, then our $8 beer is taking up nearly 50% of our revenue we received for that hour of work. If we add on top all the additional costs we incurred to make that $16.50, we’re not left with much. Think about your petrol to work, your food for lunch, the clothes you wore and the additional weekly living costs you have. If you break down your money into time spent, it makes you realise how precious your money is. Take your lunch, for example, if you spend over $10 for lunch each day, then realistically speaking after we factor in your other daily costs, that hour working before lunch has already been spent. Unnecessary spending has to stop if you want to make money, you must be clinical of your spending and your current financial situation.
Don’t do it for the GramSo many people are guilty of this, they go out for lunch every day and get a nice picture of their food and friends so they can post it up on social media for everyone to see. They try living the ‘nice life’ and show off to their friend’s list in order to get some gratification in the form of a like or an envious comment. We highly recommend not attempting this lifestyle because if you are not an Instagram Influencer then, well sorry to say this, not many people care. Spending $20 on ‘Eggs Bennie’, just to achieve 20 likes isn’t that great value for money, you could get much more value for money by doing it yourself. Our advice is to stray away from the influences of social media don’t try to follow the trends you see online.
Let Your Finances Make Your DecisionsIf you must have to have anyone or anything that influences your spending, let it be your money. This may not sound like a fun time or something you wish to hear, but you need to live with the financial situation you have and not the one you want. You can’t go out and purchase a brand new BMW for $25,000 when you make $50,000 per year, that’s half your income gone like that. Now let’s say you went ahead and made that purchase for the brand new BMW instead of opting for a cheaper second hand one. As soon as you drive that new BMW off the lot, it’s hit with depreciation of around 30%. You, figuratively have just lost $7,500 in one drive, that’s 454 hours of work, gone like that. Just because we want something, doesn’t mean we should have it. It’s a sad reality, but it’s one we need to live by.
Split Costs or BorrowWe live in a world where you can pretty much borrow anything you like. We have Air BnB, Uber and now even Lime Scooters that seem to be appearing on every street corner around the country. More people are finding it beneficial to borrow than to purchase items that they know they require little use for. Items such as Lawn Mowers, trailers, rides or even beds to sleep in, it’s a lot cheaper to borrow from someone else than to outright purchase the product you need. Also it is better for the environment, it’s a win-win! Arranging deals with family, neighbours and friends to utilise and share any tool or piece of equipment they have will save everyone money and will make sure whatever it is, doesn’t sit around and go to waste.
Stop Trying to be a TrendsetterUnless the trend is based around frugality, being a trendsetter isn’t cheap. Having the latest iPhone, clothes, BMW or piece of Amazon technology may be fun at first, but the money spent, for the extra attention you receive isn’t worth it in the end. People may take notice the first time you rock up in a new car, or they might be amazed when you show them your new phone, but half the time someone won’t notice if you are wearing new clothes. Keeping up with the latest trends that we see the rich and famous doing, gives us a dopamine rush making us feel great for a little bit, but it is never enough. You don’t need the latest iPhone just because its camera is a bit better. You are better off saving the money and buying a second hand older model iPhone that can do everything you require. You don’t need to have the latest and greatest of everything, the happiness brought on by that doesn’t last forever. Now we bet you are wondering, “How does this make me more money?” Well by not spending money you are making money. Put your excess funds into a savings fund or your KiwiSaver and let that balance grow. Gain interest from your savings and secure your finances. Living pay check to pay check isn’t a fun lifestyle to have, making sure you have enough money for emergencies as well as a steady flow of cash going towards your goals is generally a much better feeling to have. By doing less spending on unnecessary goods, you will shortly find that you have more money than you thought you did.