Did you know that 40 of americans state that they're struggling to meet their
financial obligations every month the same study reveals that two-thirds will
struggle to find a thousand dollars in case of a financial crisis so the
question we need to ask is why are so many people struggling these days well
in this video i'll reveal the three expenses that will sink you financially
and what you can do about them and if you're new to the channel then hit the
subscribe button below for more life changing content regardless of the
amount of money management books you read if you fail to identify the
expenses that do the most damage to your income then you've missed it all
generally most people's expenses revolve around food transportation and housing
now if you see the need to save money you've got to find a way to cut down
these expenses the basic law against financial ruin is spend less than you
earn in essence if you want to save more money you have to concentrate on your
three biggest money devourers which are housing transportation and food it's a
known fact that food transportation housing make up for about 60
of an average person's budget therefore if you want to save more money the
perfect place to begin is with the big three one common piece of financial
advice states that the best way to save money is to concentrate on cutting back
on small daily purchases as much as possible the idea is that routine
purchases that appear small and insignificant can amount to large sums
over time a common example is your daily purchase of morning coffee although it
is wise to cut down on little purchases and expenditures in order to save money
the overall financial impact this will have on your bottom line is debatable to
save money the best method is to start with your biggest expenses not the other
way around you might be wondering why so and i'll get into that as we progress
through this video but for now make sure that you smash the like button and let
me explain why making intelligent choices around the big three living
expenses is the best method for saving more money you see housing remains the
most significant expense for the majority of people all over the world
the cost of housing in the us makes up for about 37 percent of the after-tax
household income this implies that 37 cents from every dollar that comes into
your household goes out towards housing alone and what about the cost of owning
a home in the country let's get into that typically when homeowners devise a
budget towards housing costs they frequently factor in obvious expenses
such as home loan payments property tax home insurance hoa charges heat and
electricity bills however there is expenses that are rather unforeseen
costs with owning a home as well these are usually the expenses that most
people fail to consider and we'll come to them right now let's begin with
mandatory maintenance among the biggest merits of renting versus buying a home
is the fact that you can always contact the landlord if and when
something needs repairs or changes however once you purchase your home
you're now on the hook for the cost of these repairs and on average homeowners
can incur roughly two thousand dollars or
monthly and generally maintenance charges and when it comes to this form
of expense the common rule of thumb is that the owner should budget at least
one percent of their home's value as anticipated yearly maintenance fees
hence if your home is worth five hundred thousand dollars you should have a
budget of no less than five thousand dollars per year or four hundred and
forty dollars per month for home repair costs moving on people are culturally
obsessed with home renovations people want to ensure that their home is the
nicest on the block and of course this comes with large expenses that mount on
top of these maintenance charges we just discussed so besides these two big extra
expenses there are also expenses such as snow removal cleaning security systems
and pool maintenance studies have shown that the average homeowner spends about
638 dollars a year or 53 dollars monthly on these services now moving on to the
second of the big three expenses is transportation in 2018 the us bls or
bureau of labor statistics disclosed that the average american hospital
spends 9761 dollars annually or 813 every month
in transportation this equals about 17.6 percent of a regular take-home income
which is nothing to scoff at although transportation accounts for less than
the cost of housing there's no refuting how much of a money grab cars can be at
least when you own your home you have an asset that has a possibility to increase
in value with time cars on the other hand will only depreciate the longer you
own them and in this video i will break down the true cost of owning a car and
why it's important to have this expense mastered you see once you get into your
new car the average monthly costs that come with it include the car payment
which is on average about 550 dollars insurance of a hundred dollars gas of
150 and finally maintenance and registration
fees which should sum to about 120 thus your overall monthly cost of owning a
fresh ride is 925 now this in itself is not attractive but
things get much worse when you consider a car's depreciation if you think your
monthly car payment is the biggest expense of buying a new car you're wrong
the biggest cost of new cars is depreciation but depreciation i'm
referring to the value your vehicle loses every time you turn it on and
drive it around the block according to carfax all new cars lose 20 percent of
their value in the first year of ownership and 10 in the next four years
in essence the longer you own your car the more you're driving down its value
pun intended now assuming you purchased a brand new car for forty thousand
dollars that ride would lose eight thousand dollars in value within the
first year of purchase alone that comes out to a whopping 666 dollars for every
single month that you own the car the fact is beyond spending what you can
afford to get a brand new car is one move that will totally mess up your
finances finally let's talk about food as stated by the us bls an average
household in the united states spends roughly seven thousand two hundred three
dollars yearly or six hundred dollars monthly on just food this equates to
about thirty percent of the average take-home money the total includes money
spent on outside food aka eating out and what you eat at home aka your groceries
the breakdown is four thousand ninety four dollars yearly or three hundred
thirty seven dollars per month for groceries and thirty one fifty for a
yearly or two hundred and sixty two dollars per month for eating out so at
this point it should be very clear to you that controlling your spending on
food transportation and housing will save you a lot of money much more than
mixing out your daily coffee hence the million dollar question is how can you
reduce the money you spend on these three big expenses well stick with me
and i'll explain how to do this right now let us start with housing which is
typically the biggest expense for most people you already know that housing
costs have increased significantly in the recent past and they seem to
continue to rise every year so how can you reduce your housing costs
if prices continue to rise to answer that we need to look at why
housing costs are rising here let me share with you a fact that will blow
your mind after adjusting for inflation the average cost of housing per square
foot in the united states increased by only 4.6 percent between 1973 and 2015.
as it turns out the main reason why housing costs been so high is that
people want to live in larger homes the average home in 1973 was sixteen hundred
and sixty square feet in 2015 the average house size was 2
687 square feet so the average home was 62 percent larger in 2015 than houses
back in 1973. now what makes it even more expensive is the fact that are
fewer people living in these giant houses in 1971 three people occupied a
house however in 2015 only 2.5 people occupied a house houses are almost
two-thirds larger and have 16 percent fewer people than before and as a result
the number of square feet per capita has almost doubled now this should more than
explain why housing costs have increased so much therefore the simplest solution
to reducing your housing cost should be obvious downsize your home arguably the
worst piece of advice anyone can give about real estate is to tell you to buy
more home than you need if you buy a house and have a spare room consider all
the costs involved in maintaining that room owning a bigger home means paying
more property tax a larger mortgage payment higher utility costs and the
list goes on so if your goal is to save more money then get yourself the most
reasonably sized home possible it's a small sacrifice to make but once you're
able to properly save you'll have the option to afford that bigger and more
comfortable space later on as for transportation the answer is a little
bit obvious but the desire to keep up with the so-called joneses would not
allow people to consider it if you plan to save more money for your future or
even the unforeseen circumstances that can occur tomorrow you have to cut down
and find cheaper means to live for transportation you simply have to go for
a public form of transport train systems and public buses can surf for a while
also for being honest there are some journeys that a little bit of
willingness to exercise would solve a little bit of trekking never killed
anybody and in this case it would keep money in your pocket in the case of food
all you really need to do is stick to eating at home this is not only a good
way to save money but it could be a smart way to stay healthy as well hence
it doesn't do a lot of good to lose money and lose your health in the same
way given your goals and preferences you need to figure out what sacrifices are
worth making the main point is that you probably need to think a lot more about
how you lose money and your savings so what can you do with the money saved
from these expenses it's really simple you should invest the money for many
people the word investigates images a men in suits and watching millions of
dollars being passed hand to hand i'm here to tell you that you don't have to
be the waffle wall street just start investing even if you only have a few
dollars to invest just watch combat and interest work its magic on your money
once you have some money to spare you can start investing with the stock
trading app you can risk a small sum of money and learn valuable investment
lessons at the same time however if you want to take a more hands-off approach
there are services called robo advisors that can administer a questionnaire that
you complete and will manage your investments for you in exchange for a
small fee finally if you need more personalized advice a financial advisor
is another option to look into sure their fees are higher but the returns
you'll get will still be better than not saving any money at all which sadly many
people are still doing every single day hey it looks like
youtube thinks this next video is the one that will change your financial life
forever give it a watch and let's see if they're right