2963: Reduce the Budget Busters by Gary with Jillian Johnsrud on How to Achieve Financial Freedom

[00:00:00] Kundenservice kontaktieren? Für viele Menschen ist das der beste Weg, einen schönen Tag zu ruinieren. Aber bei Zendesk sorgen wir für eine bessere Customer Experience. Besser für die Großmutter, besser für die Floristin, besser für den jungen Mann in Hausnummer 3a, besser für sie, besser für alle. Denn während einige behaupten, dass der Kunde immer Recht hat, sagen wir, dass KundInnen immer Menschen sind. Und da wir auch Menschen sind, wollen wir etwas Gutes für uns alle tun. Zendesk. Customer Experience mit KI für Menschen gemacht.

[00:00:30] Brauchen wir wirklich noch einen Computer? Alle wahrscheinlich nicht. Aber wenn du Musik mit der Power eines Neuralprozessors neu erfindest oder unterwegs Migrationsmuster mit einem ganztägigen Akku analysierst oder deine Ideen mit dem KI-gesteuerten Co-Creator zum Leben erwächst, dann kann ein Co-Pilot-Plus-PC einen Unterschied machen. Nicht alle brauchen einen leistungsstärkeren KI-Computer. Aber wenn du versuchst, die Welt zu verändern, auch wenn es nur deine eigene ist, haben wir einen für dich entwickelt. Microsoft Co-Pilot-Plus-PC mit Snapdragon. Die bisher schnellsten und intelligentesten Windows-PCs. Die Akkulaufzeit variiert hier nach Nutzung und Einstellungen.

[00:01:00] Das ist Optimal Finance Daily. Reduce the Budget Busters. By Gary with JillianJohnZerud.com.

[00:01:08] While I was on my debt-free climb, I picked up a lot of good financial habits that will stay with me for a lifetime. One of which is focusing on eliminating or reducing your largest expenses first.

[00:01:21] I'm not talking about depriving yourself and taking out the joy in life. I'm talking about strategically analyzing your situation and finding creative ways to trim the largest amount of fat first before you give up your mocha latte at Starbucks and start clipping coupons.

[00:01:38] I try to apply the Pareto principle or the 80-20 rule to multiple aspects of my life and especially in my finances.

[00:01:46] The gist of it is 80% of my expenses come from the largest 20% of my spending categories.

[00:01:53] In my case, after taxes, the three types that make up 80% of my expenses are housing, transportation and car, and food.

[00:02:01] I'll review my tips to reduce or eliminate these large expenses without having to give up your love of life.

[00:02:10] Reduce housing expenses.

[00:02:12] House hacking.

[00:02:14] House hacking means you buy or rent a property and have roommates or tenants that help pay for your housing expenses.

[00:02:20] Typical examples include purchasing a duplex and renting out one unit and living in the other, buying a house and renting out rooms while living in the same house, Airbnb or long-term, or splitting rent with multiple roommates.

[00:02:35] All house hacking options can be great because housing is generally most people's largest expense, usually two times bigger than the next closest after-tax expense.

[00:02:45] Owning property and renting out rooms or units is most powerful because it turns a liability into an income-producing asset every month.

[00:02:54] After six years of renting apartments, the majority of the time with roommates, I recently took the plunge and purchased my first home with the plan of renting out two bedrooms while living in the master.

[00:03:06] By renting out two rooms in my house, my mortgage payment will be under $300 per month.

[00:03:11] I understand house hacking might not be for everyone, but if you're in the position to make it happen, it can be a robust solution to reducing your housing costs and to build wealth.

[00:03:21] Other ways to save money on housing expenses.

[00:03:25] Downsize to a smaller living space.

[00:03:28] Live in a cheaper cost-of-living area, which will also have more reasonable property taxes.

[00:03:33] And shop for cheaper home or renter's insurance every six months.

[00:03:38] Auto expenses.

[00:03:40] Buying an affordable used car.

[00:03:43] After I graduated college, I was stuck with a $400 a month lease payment for a brand new Toyota Tacoma truck I leased with the help of my parents co-signing.

[00:03:53] My monthly payment was taking up a significant amount of my monthly budget, not to mention the high gas costs.

[00:04:00] And I knew if I was serious about paying off my debt, I needed to downgrade.

[00:04:04] I remember one day after work, I saw an executive at my company who I had a lot of respect for in the parking garage.

[00:04:11] He was driving a 1980s pickup truck.

[00:04:14] At that moment, I felt somewhat stupid being in my early 20s and driving a new vehicle.

[00:04:19] I thought, this guy must make five times my salary.

[00:04:23] And if he doesn't need a fancy car to get him from point A to point B, why would I?

[00:04:28] After doing a lot of research, I finally sold my truck.

[00:04:31] I ended up buying a used five-year-old Toyota and had put down 80% in cash.

[00:04:36] I had a small loan for a year at 1.65% interest.

[00:04:41] I paid off that loan over a year ago and haven't had a car payment since.

[00:04:45] Now, my auto cost has been slashed by 75% after making the change to a paid-off used car.

[00:04:52] Living close to work.

[00:04:54] The majority of my recent car expenses go to paying for gas.

[00:04:58] Living close to work or working from home will significantly help with gas costs.

[00:05:03] By living close to work, you don't waste your time sitting in traffic and reduce the likelihood of repairs.

[00:05:09] I'm still working on living close to my job as I currently have a 30-minute-plus daily commute

[00:05:15] and spend $80 to $120 on gas each month.

[00:05:19] Public transportation.

[00:05:21] Taking public transportation, like riding the city bus, can save you money and time.

[00:05:26] In my city, a monthly bus pass costs anywhere between $48 to $96 a month depending on your location.

[00:05:33] If you can deal with bus schedules and multiple stops along your commute,

[00:05:37] riding public transportation is a great option.

[00:05:40] DIY auto maintenance.

[00:05:43] Just learning how to change your oil, fluids, and air cabin filters, rotating your tires, etc.

[00:05:49] can save you thousands over the years.

[00:05:52] All basic routine maintenance videos are available on YouTube.

[00:05:56] And once you do it a few times, you will know how to do it for life.

[00:05:59] I always cringe when I see people paying to get their oil changed.

[00:06:03] They're paying over $50 for a regular oil change when I can buy the best synthetic oil for half the price

[00:06:09] and do the job myself in 20 minutes.

[00:06:12] Invest a little time upfront learning and reap the compounding rewards over time.

[00:06:17] Other ways to save money on auto expenses.

[00:06:21] Biking or walking when you can.

[00:06:24] Carpooling.

[00:06:25] And shopping for cheaper auto insurance every six months.

[00:06:29] Food expenses.

[00:06:31] Batch cooking.

[00:06:32] I save money on food by meal prepping a few times during the week.

[00:06:37] Typically, my girlfriend and I batch cook that produces eight meals or four meals each,

[00:06:42] two to three times per week.

[00:06:43] We try to keep the batch cooking costs under $2 per person per meal.

[00:06:48] There are some great and healthy recipes we use from the Choose 5 Vault that meet the $2 per person per meal rule.

[00:06:56] Meal prep Sunday.

[00:06:58] Limit eating out.

[00:07:00] When you break down the costs of eating out, you quickly realize it's really expensive.

[00:07:05] And most of the time, not too healthy either.

[00:07:08] Compared to batch cooking, the cost of eating out is typically five to ten times the cost of batch cooking.

[00:07:14] Personally, I try to limit eating out to one time per week.

[00:07:17] When I do go out, I try to pick places where I don't need to be weighted on to avoid extra costs for tipping.

[00:07:24] Other ways to save money on food expenses.

[00:07:27] Drink water with meals eating out.

[00:07:29] Share entrees with another person.

[00:07:32] Shop at Costco for bulk items and Aldi if you have one in your area for cheaper produce.

[00:07:37] And buy groceries by unit price.

[00:07:40] Final thoughts.

[00:07:42] By implementing the tips mentioned to reduce housing, auto, and food costs, you make the most significant dent in your expenses.

[00:07:49] Applying these tips can take a little bit of planning, but in my opinion, won't require any significant lifestyle changes.

[00:07:56] Once you're able to implement, you'll be able to save hundreds of dollars each month.

[00:08:01] That money can now be used for paying off debt, savings, or investing, or traveling.

[00:08:07] Compounding these changes over time can drastically change your life.

[00:08:14] You just listened to the post titled, Reduce the Budget Busters by Gary with JillianJohnsRude.com.

[00:08:21] And I'll be right back with my commentary.

[00:08:23] I found when I first got into fixing my finances, it was very fun to focus on the big three of housing, transportation, and food.

[00:08:33] You're going to see the biggest improvement in your finances when you start to optimize in these areas.

[00:08:39] Over time, it becomes harder or less impactful to continue cutting costs.

[00:08:44] And I'll also say that every person has unique skills, preferences, and circumstances that will allow them to optimize in different ways.

[00:08:54] That being said, I'd encourage you to watch what other people are doing for inspiration, but be resourceful in your own way.

[00:09:02] So I'll give you an example.

[00:09:04] As is recommended in this article, after I bought my car, I wanted to change my own oil as a way to save money.

[00:09:11] So I found someone to teach me to do it.

[00:09:14] Then I bought the ramps and the oil collecting contraption and the funnel and the gloves.

[00:09:20] And you get the picture, right?

[00:09:21] I bought all the stuff.

[00:09:22] But I'm telling you, the second I tried driving up on those ramps, I knew there was no way I was going to do this by myself.

[00:09:30] I had my friend there guiding me to make sure I didn't drive too far in that moment.

[00:09:35] But I just didn't feel comfortable doing it on my own.

[00:09:39] So how do I get my oil changed now?

[00:09:41] I found myself a Midwestern gentleman and now he does it.

[00:09:45] Okay, so it might not be practical for everyone to go out and get a boyfriend to save money on oil changes.

[00:09:51] But my point is, you have people and circumstances in your life that can help you optimize.

[00:09:58] And social capital is way underrated when it comes to reducing expenses.

[00:10:03] I'll leave it there for today.

[00:10:05] That is a wrap for another Sunday show.

[00:10:07] Have a great rest of your day.

[00:10:09] And I'll be back tomorrow reading to you where your optimal life awaits.