Your ‘fixed’ monthly outgoings represents those bills that exit your account every month, some never change, others may go up annually or less often. Car payments, your mortgage and your phone are all examples of fixed monthly outgoings.
What tends to happen over our lifetime is that these fixed monthly commitments gradually increase until they are at a peak, before going into decline again as we pay things off and prepare for retirement. As a graph, it would look like the bell curve below.
By minimising fixed monthly outgoings, we stop the creep that happens when we begin to earn more. When we earn more we think we should have certain things that fit with a life that is created for us by the media. We are told it will increase our quality of life, and in turn our happiness. What actually happens is we end up with a lot of monthly expenditure and very little freedom.
Minimalism equals freedom. Minimise your fixed monthly outgoings and your freedom will increase.
Here are some of the areas where you could decrease your fixed monthly outgoings.
Loans– The key is to pay them off and not replace the debt. Could you sell something to pay off your loan? Could you take on additional work or create a side income short term to pay it off?
– The most radical approach would be to downsize? Some people may even have enough equity in their current property to sell their current home and buy a new one outright. If these options are off the cards, could you reduce the interest rate by moving to a different lender?
Credit Cards– Can you afford to pay them off in the next few months? If not can you transfer to 0% credit?
Insurance– Do you definitely need it? If you do, can you get a better deal?
Cars– If you have more than one family car, could you reduce to one?
Energy– Can you reduce your energy usage? Can you get a better deal with a different provider?
Memberships– Do you use them? Do you use them more than the cost of paying for individual visits (if there is that option)? Is there a cheaper alternative?
Phones– Can you skip your next upgrade and get a SIM only deal? Are you on the right deal, could you you manage on a lower tariff?
TV/Cable– Can you cut back on your subscriptions, or get rid of them altogether?
– Do you get value from all your subscriptions? Are there any you can forgo if it meant increased freedom?
The point of this is exercise isn’t really to cut back to the point of real sacrifice, but to find your enough line, and then to forgo the rest in return for increased freedom.