The combined weight of your outgoings is probably the primary reason why you cannot quit your job. As such, you have no doubt determined that you must create a business that makes money in order to leave work behind.
You’re half right. While you will need to create a profitable business, you can accelerate the process of leaving work behind dramatically by cutting down on your expenditure. And believe me, everyone can cut back on their expenditure. It’s all a matter of perspective.
With the above in mind, in this post I am going to show you how to dismantle and rebuild your outgoings with a fresh perspective and also give you a little insight into how you should view your inessential purchases from now on. In doing so, you will take a huge leap closer to leaving work behind.
Create Your Base Point
Grab yourself a pen and paper (or fire up a spreadsheet) and start with a blank sheet. In terms of limiting your outgoings, a blank sheet represents perfection. It may be unobtainable, but by aspiring to perfection, you will achieve far more than you would otherwise.
From that point you should add only the bare essentials: food and shelter. Not only that, you should think long and hard about how you can limit these outgoings. You could live in a less expensive home; you could stop eating out; you could cut out alcohol; you could use less expensive ingredients in your home cooking. The list goes on. Be utterly ruthless — act without consideration for your current quality of life.
Once you are finished, write down the total (I recommend totting up the annual costs then dividing by twelve to get an average monthly figure). Believe it or not, that is the money you need, in absolute terms, in order to survive. If you’ve gone through the exercise correctly, it’ll be a very low number.
In theory, if you could earn that much from your online endeavors, you could quit your job.
Add the “Essential Inessentials”
I know what you’re going to say at this point: there are an enormous number of “essentials” that I have missed out. Health insurance, schooling costs, travel costs and so on. You might call these “essential inessentials” in that they are demanded by modern society.
Point taken. The practicalities of modern living often demand that you have additional outgoings, so start adding these to your list. However, as before, be utterly ruthless in limiting your theoretical expenditure. You could opt for a less expensive insurance package or consider selling your car and using public transport.
Finish by subtracting the income produced by any passive investments (shares, bonds, etc.) from your total expenditure. What you should be left with is a practical representation of the amount of money you need to earn in order to survive.
Consider the True Inessentials Carefully
Now drill the following truth into your head until it is firmly lodged in your brain: any expenditure beyond the above total is inessential.
Any additional money you spend can be directly correlated with having to do more work. By spending less you can leave work behind more quickly and make less in order to maintain your quality of life once you have done so. That’s the simple equation.
You should frame every single purchase you make in the context of that reality. It is inevitable that you will spend more — you’ll want to watch a movie, listen to a CD or read a book (alternatively, you can do all three of these things free of charge by joining your local library). There will be additional items of expenditure and you shouldn’t necessarily feel guilty for spending more than the bare minimum, but you should learn to truly appreciate what spending money on inessentials truly represents: more work.
The Psychology of Consumerism
Every time you spend money on an inessential item should be an event; it should be consciously considered in a qualitative manner.
First of all, ask yourself if you truly need it (the answer will invariably be no). Then demand a compelling and logical argument as to why you should purchase it. Will it truly add value to your life, or will it simply add to the noise?
A desire for something bigger and better is often shrouding an intrinsic issue linked to your desire. If you want a bigger television, you probably watch too much TV. If you want a new tablet, you’ve probably become too attached to technology that didn’t even exist a few years ago. If you want to go to the cinema more often, movie-going has perhaps become more of a somewhat tedious habit than an event to be relished.
Alternatively, you may simply be blowing the benefits or your potential purchase out of proportion. For example, I recently justified getting a new iPad Mini on the basis that my iPad 4 felt heavy and cumbersome by comparison. Did I think this before the iPad Mini came out? No. My argument was based upon persuasive marketing more than anything else. (I should mention that I got the iPad Mini as a present for Christmas — I wouldn’t have bought it for myself.)
How Much Closer Are You to Leaving Work Behind?
I know it’s not glamorous or particularly exciting, but spending less can get you much closer to leaving work behind than you are now.
And as the old saying goes, the best things in life truly are free. Leaving work behind means having more freedom to do the most rewarding and fulfilling things: spending more time with family and friends and expanding your horizons.
Most importantly, it puts you in control of your life. Your existence will no longer defined by how much money you make. Take it from me — that’s a really good place to be in and is well worth the perceived material sacrifice.
For those who go through this process, I am curious to know just how little you can budget. Let us know what total you come up (and how) in the comments section below! Alternatively, if you have any suggestions and tips of your own for reducing expenditure, please share them with us.
Photo Credit: JD Hancock