When you're cutting expenses, you may decide on some big changes.

Cutting expenses: time for the big changes

The less you spend, the more you can save. The higher your savings rate, the quicker you’ll reach financial independence. When starting my FIRE journey back in August, I made various small changes to cut expenses, but for 2019, it’s time to take it to the next level.

It’s very simple: the gap between your revenues and your expenses is what you can use to pay off your debt, save, or invest. In order to grow that gap, you either increase your revenues, or you lower your expenses. Bonus points if you manage to do both. It sounds like one of those things that is actually harder than it seems, but it really is that easy. Last summer, I started by tracking all my expenses from the previous 3 months and based on that, I made various changes to my fixed costs.

  • I cancelled magazine subscriptions @ €15 per month
  • I changed my mobile phone contract which saves me +/- €45 per month
  • I cancelled my Dropbox subscription @ €10 per month

Together, that’s €70 per month that I’m not paying anymore, without really missing anything. That’s my monthly health insurance bill! But I knew that if I wanted to make more impact after this, I would have to start making changes that I would feel. One option would be to quit my Spanish classes (€140 per month). That really isn’t an option for me since I believe it’s essential for me to learn the local language. That leaves two other options.

I’m a member of a coworking space and I love it. The location is beautiful, the people are great; every day I’m excited to go there. I don’t do it to get my work done, because I’m actually way more productive when I work from home. However, I turn into those freelancer cartoons where I sit in sweatpants 3 days in a row without seeing another human being who isn’t pixelated. In other words, I signed up to the coworking space to build up my social life in the city where I had just moved to.

That social life costs me €254.10 each month. Sure, it’s a business expense so the actual cost is lower, but nonetheless, it’s a significant amount of money. Add to that the coffees I buy there, the lunches, and the drinks we have together afterwards and all of a sudden that €254.10 is pretty accurate. So today I made a decision; I cancelled my subscription.

I was considering doing so for a few months already, but with the new year coming up, I just want to make bigger steps on my path to FIRE. By now, I don’t rely on the coworking space anymore for my social life, and with wanting to increase my revenues, I actually need to be where I am most productive, which is at home. To me, this really is a big step, but it feels right.

And then there is the second option, which would be an even bigger one. It’s the one where almost everyone could make the biggest impact on their expenses: housing. I could easily move somewhere else and save €400-€500 in monthly rent. I currently live alone inside Barcelona. I could find a room and share a house somewhere in the city, or I could find something just for me outside the city.

When I moved to Barcelona, I always knew that I wouldn’t stay in the city forever. I’m not a big-city girl. I love the mountains, nature, being outside and hearing the birds. If the city is at 30 minutes away, that’s perfect for me. Thankfully, there are plenty of towns around that have nice city centers with plenty of restaurants, bars & shops, all within a 30 minute radius from Barcelona. Now with my new money goals, maybe 2019 will be the year where I make that step.

Let’s see what the year will bring…

Leave a Comment