Five Keys to Financial Freedom: Key 3

Week 3 – Rightsize Your Life.

It’s week three of our financial independence month and this week’s key is lifestyle. You can read week one, and week two to get caught up.  Time to tackle rightsizing your life and living within your means. Living within your means does not equate to living like a pauper. It’s not about that. It’s about matching your monthly cash flow to your basic needs and to your goals. Obviously, food, clothing, and shelter are your top priorities otherwise you will not be able to earn a living. There also has to be some room in your cash flow for the non-necessities, those discretionary items that make life fun and worth living. 


Here in the San Francisco Bay Area, housing consumes a tremendous amount of our incomes. The mild weather, lots of high-paying jobs, culture, and the natural beauty of the area seem to be a draw that keeps people coming here to strike it rich. Housing is usually the costliest item. So, how do you rightsize your life?

No matter where you live, start with the big-ticket items; housing and transportation. Do you really need the size of home you are renting or buying? Yes, extra space is nice for guests and it always feels good to live in the best part of town, with a nice home and all the toys. But this is where you need to be brutally honest with yourself and ask, are you living above your means? It doesn’t mean that you need to sell everything and move, but you should make some adjustments.

- Start with immediate home and family. Tell adult children living at home they must start paying a portion of the utilities and even rent.

- Have more space than you need? Time to consider monetizing that space. Nothing wrong with considering a roommate as an adult or even renting out part of your home. It’s a means to an end and does not have to be permanent.

- Consider a smaller, more affordable home or apartment.


- Transportation: compare the cost of a year’s rideshare expense versus owning your own car. If you still need to own, consider buying a car that is 12 – 24 months old. New cars depreciate immediately so you can save yourself a lot of cash by researching a recently owned model that may still be under warranty. Look for low mileage, good resale value, and a model that has been dealer serviced and never wrecked or had a major repair.

- Survey all paid services: entertainment, meal prep/delivery, media, club memberships, etc.  Cut those expenses and redirect that money to yourself! Chances are you are paying monthly for things you rarely, if ever, use. 

- Get an app to help you track spending. If you find that you are eating out five nights per week and hitting the local café three times per day, you’ve just identified a spending problem and a savings opportunity.

Sell your stuff! Seriously, take a look around and see what items you no longer need. Sell off your old sports equipment, antiques you no longer like, collectibles that are not gaining value, tools, books, art, anything you can live without and that you were never really attached to can go! It’s a good way to raise some quick cash for your emergency fund.

Again, you don’t have to be a pauper but really think about how much you are spending on things you don’t need. Think about the items and services you actually need and that bring you joy. Match your cash flow to these items and let the rest go. You’ll be glad you did.

As an independent Certified Financial Planner™, I can help you decide how to rightsize your life. Contact me and let’s get started! #talktometuesday  #rightsize #Hireaplanner #bonus #income #cash #CFPPro #housing #FiveKeysToFinancialFreedom #FinancialIndependence