I am currently working on my New Year’s Resolutions for 2023. Although I am still trying to figure out what that looks like, one of the things I am considering is how to cut back on a lot of my spending. To put things simply, I spend and waste a lot of money. Whether that’s going to Starbucks or my local coffee shop on a daily basis, or eating out everyday at expensive restaurants. It seems like I am getting to the point where I need to learn to live on less. My income situation for the future is a bit uncertain at the moment, given my health concerns. So, learning to live on less is not a bad thing, and the sooner I start, the better. Let’s dive in to discuss.
Coffee Shops
Right now, I practically live at the coffee shop. I used to go to Starbucks everyday, but, for the past several months, I stopped going to Starbucks religiously. Instead, I go to a coffee shop that’s a bit farther away, but I like the environment better. Their prices are a bit more expensive than Starbucks. My large caramel vanilla latte costs more than $7. I typically drink at least 2 a day. Ouch! Let’s just say that the coffee shop loves my wallet.
Restaurants
Unfortunately, I don’t cook. So, I eat out every day! That is both sad and expensive at the same time. Although I plan on making resolutions for 2023, I don’t think this is going to change. In fact, when I move to my new location, I plan on living in the downtown or midtown area. That way, I have easy access to coffee shops, restaurants, bars and clubs. So, not spending money is going to be a challenge!
I’ve lived in a downtown area before. In addition to the cost of rent, I noticed that I was spending WAY more money because I would literally go out every night. That was only about 2 years ago. Hopefully, I’ve matured since then – hopefully.
What’s worse is that I am moving to an area that has a LOT more to do! There will be concerts, festivals, museums, sports games, and other tourist attractions, etc. Let’s just say that I am going to need to be disciplined and stick to my entertainment budget. It’s going to have to be strong but realistic, as I don’t want to waste all my money on entertainment. Wish me luck.
Gaming
If I am to be honest, I’m addicted to playing Hearthstone. The problem isn’t so much that I play Hearthstone, is that I choose to pay to play the game. I spend about $15 a day playing Hearthstone!!! That was not a typo.
There are cheap ways to play the game. In fact, I can easily play it for free. But, I like playing in Duel mode. Whenever I run out of coins or runes, I end up buying more just so I can keep playing in that mode. There are other modes to play, that are always free, but, like I said, I’m addicted.
Starting in 2023, this is going to have to change!
I think I will try to play Hearthstone for free. In addition, I will try and concentrate on other games, such as playing chess or other over-the-board games. That way, I can still have fun, but for less the cost. Wish me luck.
Investments
Another area that I plan on making immediate improvements in has to do with my investments. Starting in 2023, I plan on limiting the amount of money I use to invest.
Currently, I invest the maximum in a 401k plan and my Roth IRA. Well, I plan on cashing out both to buy another beach condo or a primary residence. If I do, there’s no point in me trying to build up these accounts.
If for some reason, I don’t qualify for a mortgage, or I don’t buy any more real estate in the next 2-3 months, I may continue to max out my Roth IRA. But, I will stop my contributions my 401k account (which is quickly becoming a 201k account).
That is going to help with my cash flow situation on a monthly basis. My initial plan will be to wipe out my credit card debt. That debt is about $7000. Then, I plan on saving the rest to build up my cash for the a future home purchase. If I don’t buy a primary residence in the next 2-3 months, then the future purchase will be another beach condo.
A. No To Crypto
As a practical matter, I will likely quit my investment into cryptocurrencies. I spend about $200 a month dollar cost averaging my way into bitcoins and other digital currencies.
Although $200 is not necessarily a lot of money, not having to do that will help me save more towards my ultimate goal of purchasing another beach condo. There is a small chance that I may simply reduce the amount I use to invest in (think $50 rather than $0), but we shall see.
B. Yes To Dividend Portfolio
Currently, I invest a minimum of $220 to my dividend portfolio. As of right now, I don’t plan on reducing that amount. In fact, there’s a high likelihood that I will be increasing my contribution come 2023.
Because I plan on making another real estate purchase, there is a fair (but not overwhelming) possibility that I may once again cash out of my dividend portfolio to do so. The good news is that if I do make another real estate purchase, I will literally be out of money. That would be the last real estate purchase I ever make. Nevertheless, I am trying my best to not touch my dividend portfolio.
In order to make the real estate purchase, I will have to cash out of either my Roth IRA or 401k or both. But I still need money not just for the down payment, but also closing costs. I also need money in reserves. So, I may use the funds in my dividend portfolio to help act as reserves. We shall see.
Final Thoughts
That’s pretty much all I spend money on. I rarely buy clothes. I don’t plan on cooking in 2023, but I don’t have to always by expensive food to eat either. I will try to stick to a food budget, but it’s just not how I operate. My fridge is pretty much empty in my house, because I don’t buy groceries. So, this will continue to be a work in progress.
I practice Conscious Spending as defined by Ramit Sethi. Not saving for retirement is going to help me a lot. I’m going to feel like I am rich, but I just have to ensure that I put that money I was using for my retirement to good use. So, instead of contributing to a retirement account, I plan on contributing the max to a savings account in hopes of buying another beach condo later.
I hope the stars align for me in 2023. They didn’t in 2022, but the good news is, I still have hope.
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