Can You Avoid the Monthly Charges?

Do you ever feel like no matter what you do, you can't really build wealth? That when you get your paycheck and you're all finished paying your bills, you have just enough left to hand over to the school yard bully, AKA the federal government? It's interesting to look at how society has evolved, always providing a relative level of comfort to individuals, but very efficiently separating the "have's" from the "have not's". If the old addage "It takes money to make money" is true, then the vast majority of us are almost destined to fail from the start.

Have you ever gone to a bar and downed a cold one? That cold one was good, but that second one tasted really good too. The third, fourth and fifth were all a necessity at the time because the game was on. The six and seventh one you really didn't need but everyone was still drinking so you figured what the heck. Then the next morning your head hurt and your wallet was empty. Jim, Johnny, Jack and Jose pounded on your skull and stole your lunch money. Have you ever felt like that? That sounds a lot like monthly payments to me.

I want you to think about all of the FIXED monthly bills you pay and what they add up to. If you have a mortgage, go ahead and leave the principal amount off as this in a sense is really savings. Which of these do you have?

Mortgage Interest
Car Loan
Cell phones (voice, text, data?)
Cable and Internet
Home Owners Association dues
Mob/Mafia kickbacks for protection
Home Owners Insurance
Car Insurance
Gym membership
Gaming Membership (like X-Box 360)
Student Loan Payments
Furniture or Electronics you bought on credit
Netflix or Blockbuster Online

What other FIXED monthly expenses do you have? Now I know there are tons of other things you have to pay for, such as food, gas, clothing, etc. but at least those you can control. Not all of these monthly expenses are bad. Some of them can actually save you money. We'll will get much deeper into specifics during the ongoing discussions about the budget and the "expenses" variable, but right now, just imagine how much money you could be saving by ridding yourself of just a couple of these expenses (The Coco Lounge would like to remind you never to cross the mob). Should you invest those extra savings, you could actually be making money and increasing your net worth through, stocks, dividends, bonds, paying off interest loaded balances, etc.

If you bought that less expensive car and rid yourself of a car payment, or cut your phone plans in half, how much could you save? If you never go to the gym, quit kidding yourself and cancel that membership. If you're not going to feel good about working out, then don't feel bad for giving your money away. Or give up the MLB package for a year (since watching 162 baseball games is really all that exciting anyways). All of these things are great to have, but going back to our discussion on the budget, EVERYTHING needs to be prioritized. Think about your long term goals and how much quicker you could reach them without all the sandbags holding you back.

A year after graduating from college, I moved  to another state and only took what would fit in my car. I found the cheapest apartment I could find in a decent neighborhood and my apartment was furnished with an air mattress and a card board box I flipped upside down to set my work computer on. I split the internet bill with my next door neighbor. I bought kitchen supplies so I could save money by cooking rather than going out. But I had no cable. My rent was half of what I was paying before. My cell phone was 3 years old (an archaic flip phone - still got it) with minimum weekday minutes and texting, no data. I didn't NEED that stuff. As a general disclaimer, my dating life was sub par for a while and the line "you wanna watch a movie from my laptop on my airmatress" was never a big hit, but a year later I had met the love of my life and we were looking to buy a house. I couldn't have ever afforded a house without that money I saved that year. I'm not trying to say going to the extereme is the way to go, but think about what's important to you and how you want to get there. Then try to ditch all the extra baggage.

Sincerely,

Coco