How To Free-Up 10% to 15% of Your Income
by Michael G. Peterson
Would you be interested in freeing up 10% to 15% of your current income? Just
imagine what you could do with this money. You could pay down your debts,
increase your savings, or work toward that next important purchase that you have
in mind. Wouldn't it be exciting to actually have money left over at the end of
I know what you are thinking: "That would be nice, but not if I have to budget
every dollar". What if I told you it could be done without budgeting? What if
you could accomplish this in a week's time without too much effort? Would you
take a few steps in order to improve your finances?
If you answered "yes", let's go through the simple steps required to make this
Step #1 For a total of 7 days we need to track every single expense.
This includes credit card, check, and cash purchases. For this program to really
work you will have to track everything (even pocket change). The easiest way I
have found to accomplish this is to use a blank check register and write down
every transaction that you make for the next 7 days. And I mean every expense,
even if you give your child a quarter for a gumball, track that expense. We need
to collect the date the purchase was made, and the item that was purchased (this
part of the exercise is actually most of the work, and really isn't all that
time consuming - especially when we keep in mind the possible benefits).
Step #2 Once we have tracked every expense for the last 7 days, we then
need to go through each of those expenses and evaluate them. What we are looking
for is which expenses fall into the "wants" category, and which expenses fall
into the "needs" category. As you try to identify these, let me give you some
coaching. Is that Diet Coke habit every morning really a "need", or is it
actually a "want" that could be cut back in order to improve not only your
finances, but also your health? The idea is not to identify how many things that
you enjoy that will need to be sacrificed, but to identify the items that you
really could do without - and not suffer.
Once you have identified the "wants" that you don't really "need" in order to be
happy, add these expenses up for the week. If you are the typical American you
will find that these unnecessary "wants" will add up to approximately 10% to 15%
of your take home income. In fact most people who do this program, are shocked
to find that they really do waste a lot of money on things that they had no idea
would affect their finances so dramatically.
Step #3 Commit to saving. This is probably the hardest part of the
program, and within reason you have the freedom to choose your "wants" for the
day or to choose your "needs". Now I know that some days that "Diet Coke" (or
fill in your own vice here____) is an absolute "need". When you are having that
kind of day, go ahead and reward yourself for being so good the rest of the
week. But make sure that you keep your objectives in mind for the long run and
commit to saving that money for the next day.
Now before you give up on putting these steps into place, lets realize the fact
that the benefits of this program really do add up. In fact the average American
making the average wages will find that they are able to free up $200 to $300
each month. You are probably thinking "sure, but that won't work for me". In all
of our experience in teaching this program we have not yet (knock on wood) found
anyone that was not able to identify and free-up a portion of their take home
This newfound savings can go a long way in making your financial picture much
brighter. It can help you extinguish debt in a fraction of the time, put money
away for a better retirement, and get you out of the month to month budget
crunch that so many of us deal with all of our lives.
And remember this: If you save only $1 per day and invest it at 10% interest -
in 56 years it will grow to $1 million. Every dollar counts. Make sure you get
the most value out of every dollar you earn, by focusing on your financial goals
instead of the wasted "wants" of life that put most of us in financial bondage.
© Michael G. Peterson is the Vice President of American
Credit Foundation, an IRS 501 (c)(3) non-profit consumer credit counseling
organization that has assisted thousands of individuals and families with their
financial situations through seminars, education, counseling services, and, debt
management plans. For more information, and free consumer resources visit: