Managing a household budget in hard economic times can be tricky. Even trickier is saving money while living a luxuries lifestyle. Here are some tips on how to do both!
Prioritize to Cut Costs
The first step to living large on a small budget is to prioritize. Make a list of the five luxury activities that you can't live without. This could be hitting up the spa for a massage or a body wrap, your before work fancy coffee drink, the salon, meals out and home help services.
After you've made a list of the five luxuries you can't live without - write down five financial goals. Perhaps you want to add to a retirement account, get on saving for a house, start a college fund for your children, go back to school and change your career, and putting aside a nest egg.
- Make a list of the five luxury activities that you can't live without
- Make a list of your five financial goals
Once you know where your priorities are you'll be able to manage building assets, while keeping your luxuries.
Revamp to Save Money
To live large on a small budget, follow a few tips. First off, take the sage advice of financial wizard Suze Orman and pay yourself first. Take that list of five financial goals and start working on number one.
Example: Your number one financial goal is to have a cushion in your savings account. Calculate how much per paycheck you can put aside (even if it is as low as $20/paycheck) and put this in your savings account before you pay bills, buy groceries and go for luxury.
This easy tip will keep you from spending your savings, while still giving you some cash to spend on your favorite luxuries.
Now for the fun part. Take your top luxury and go for it! Don't skimp on your monthly massage or buying a fun new pair of shoes. But for the rest of your luxuries, it is time for an overhaul. Save money by going luxury on a budget.
Example: If fancy morning coffee drinks ($4 and up per cup) is your daily luxury, give it to yourself! But, revamp it. Instead of heading to your local coffee shop, consider investing in taking 10 minutes to do it at home. The grocery store has everything you need (chocolate syrup, milk, low cost espresso makers, luxury coffee) to make coffee drinks at home.
The benefit of revamping your luxuries is that you can get creative. Don't settle for a huge price tag on shoes at the department store. Instead, hit up your local high-end thrift shop and buy twice as much for the same amount. For lunches out, try the tip of buying your favorite beverage (iced tea, energy drinks, bottled water) in bulk at the grocery store and bring it to the office. Skip the side on your deli lunch and you could save as much as $5-$8 per meal, while still enjoying lunch out with your colleagues and friends.
Other Luxury Tips
- Extend your manicure by resealing your nails with a high gloss, quick dry polish (try Wet 'N' Wild for low budget options)
- Extend your salon hair color with a box color. Get a close match and leave it on for only 10 minutes for a great shine. Or just touch up your roots. Sally's Salon is a great place to get cheap hair deals.
- A luxuries night out does not have to be expensive. Skip the appetizer and stick to water and share a great dessert. Keep an eye out for happy hour specials and hit up the latest weekend matinee.
- Instead of hitting the spa for a full-on day, take advantage of seasonal packages or just go for a soak in the hot tub.
- Look out for great travel deals and take advantage of frequent flyer miles or special hotel, car, plane combo deals.
- Sign up for your favorite shops frequent shopper cards and don't forget your punch card when you go to the coffee shop! Take advantage of coupons sent to you from your favorite stores, or special card holder sale events.
Splurge Once in Awhile
The key to living large on a small budget is to focus on your financial goals first and then splurge on your luxury items afterward. Treat yourself once a month to something luxuries and indulgent. A coffee out with your girlfriend followed by a movie, a brand new handbag (if you catch it on sale even better) or a weekend trip to a nearby destination.
Attitude is Everything
When it comes to living a luxuries life on a budget – attitude is everything. Revel in your monthly massage and brag to your friends about your weekend getaway to Mexico, safe in the knowledge that you are meeting your financial goals and giving in to your favorite luxury once a month without breaking the bank.
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