Choosing Freedom Over Debt
On Tuesday I wrote about how I have changed the way I spend my money in order to accelerate my debt payments. I wrote about ditching my car, cutting cable, eating healthier and cheaper, and destroying my frivolous spending habits. All of these changes have compounded into each other and allowed me to dramatically cut my monthly variable expenses.
The tips on cutting costs that Mr. Money Mustache lays out actually do work. Today I have the proof.
This week I have been busy inputting all of my spending from 2012 into my budget tracking worksheet. With all of this data collected I have analyzed it in order to illustrate how my new spending habits have impacted my finances compared to last year. The effects are great to see.
The secret to my extra monthly debt payments is keeping my spending under control. I have been able to cut my variable monthly spending by more than half. These costs include food, bars, shopping, restaurants, etc. Rent, student loan payments, utilities, etc. are excluded from these totals.
This right here illustrates the effects of making smart spending decisions. More importantly, I don’t feel like I’m missing out on anything compared to last year. I don’t miss the daily lunches out or the weekly junk food trips or cable. I didn’t need these things in my life and I don’t miss them now that they are gone.
Debt Pay Down
Thanks to these smart spending decisions I am paying down my debts much quicker than last year. In fact I have already paid off more debt in the first two months of 2013 than I did in all of 2012!
Are you convinced yet that simple changes in spending habits can profoundly impact your finances?
By cutting spending and paying off debt more quickly I have been able grow my net worth at a more rapid pace compared to 2012.
As long as I stay focused and keep working towards my goal my net worth will keep improving. By the end of the 2013 I could improve my net worth by 30% or 40%. In a few short years I will even have a positive net worth!
So there you have it: simple changes to spending habits, a dramatic increase in debt payments, and a positive effect on my financial health.
This isn’t rocket science and doesn’t take much time to get started. I’m a living, breathing example of two different lifestyles and two different results. In lifestyle debt I spend most of my income, only make the minimum debt payments, and save “whenever I can.” In lifestyle freedom I change my spending habits, pay off debt, and start building my net worth to one day be financially independent.
Now that I know there is a choice, it was a simple one to make.