My 3 Key Money Saving Tips for the Self-Employed
People often ask for advice on this topic. How do you manage your budget with a tight income living in Vancouver? How do you take off on extended trips and still deposit into savings? I think I must have been born with the frugal gene (actually it was more likely a nurture situation, ingrained in my psyche thanks to my self-employed family) because this saving mindset comes quite easily to me.
Don't get me wrong, budgeting and managing my finances isn't free of it's own struggles. (Can I afford to treat myself to a night out this week? Can I afford a new winter jacket this year or do I need to hold out until sale season? I am making enough this month to pay for my business and personal expenses?) I work hard not to let these thoughts stress me out or cause too much overwhelm in my daily life.
Here are my 3 key tips that you can incorporate into your daily/monthly routine to help manage your spending while still enjoying life!
1. Stop Eating Out
Seriously. This is the #1 way I save money on the daily. I set a limit to the amount of meals I'm allowed to eat out within my budget. Currently, my goal is to eat only 1 meal out a week. That is flexible of course. If I already had lunch with a friend this week and my best friend is having a last minute dinner party to celebrate her birthday, I'm going to go! But having a general rule of thumb to guide you in a positive direction helps so much. The second part of this step means you do need to go to the grocery store (preferably a reasonably priced one; Whole Foods is designated for special items only in my budget world). Buy enough food for a few big dinners that can provide lunch leftovers, and some key breakfast items and snacks to avoid popping out for donuts, coffee and breakfast sandwiches on your way to work.
2. Weigh Your Purchases
Something I've been trying to do recently is think about every big item before I buy it. Some examples of a big item for me would be: an item of clothing, accessories (shoes, bags, watches, sunglasses), hobby gear (camping & sports equipment, photography accessories, travel gear) and so on. I want these items to be investment pieces that last me many years to come (yes even clothing! I'm trying to buy less throw away, trendy items). The best way to manage spending on this front is to research before you buy. Maybe you see something in a store that catches your eye, instead of instantly purchasing it, leave the store, think about it and google other brands that offer similar items. This extra step of thinking about the product will help you determine if it's worth spending your money on. If you have non-buyers remorse and decide you will use the item frequently and for years to come, you can feel confident in your purchase.
3. Pick Your Spending Priorities
I love to travel, and travel is expensive. I've educated myself (through experience and research) on affordable flight patterns, best places to stay and I don't travel outside of my budget. I get affordable airbnbs and share hostel rooms with friends (or strangers) when needed. But the most important thing is, I know travel is my top priority. One of my life goals is extended travel and self-employment is making that goal a reality. This means I know I can't afford to go out partying every weekend, dropping $100 at the bar each night. If I did that, I wouldn't have the disposable income available for travel. Figure out what's most important to you and it will help you save the money needed for that goal. Maybe you do value a party-heavy social life, or are saving to buy a house. It means you can't spend an equal amount of your income on each of these areas or you'll never have enough to do any of them (assuming you're not making 6 figures that is).
I know you've probably heard many similar tips in the past from online money gurus, or your parents, or your financial advisor, but I hope this can help some of you who may be in a similar position. If you're living on a freelance budget and still settling into the lifestyle change like I am, it is possible to spend smart, and save for the things you really want.
If you have any tips of your own, feel free to share! Happy Friday Friends :)