How’s it going, everybody? This is BeatTheBush. Today, I’m going to talk about how you can stop living paycheck to paycheck really really quickly. You see, most of America spends way more than the bare necessities, making the illusion that it seems like you’re living paycheck to paycheck. But all that’s necessary for most people is that you can cut back on luxury items and then all of a sudden, you will have up to 30% of your paycheck to spend on whatever you want. The first thing that’s keeping most people from spending at such a low level is the need to keep up with others. The majority of people that I come into contact with likes to show off their things, likes to show off their status. So all you have to do (which is probably harder for some than others) is to be more humble. When you’re more humble, you don’t really care about showing your possessions off to others. When you’re standing next to someone, you don’t care as much that they’re more well-dressed. Or they look fancier. And, you know, having a nice watch or whatnot. Personally, I get a lot of flack for using my Freedom Pop phone which is a free cell phone. People wonder “Hey, I’m an engineer; I can afford a cell phone.”
Of course, yes I can. But it’s something that’s not that important to me. And I can get an equivalent service with that service already. I found a great way to deflect any kind of criticism towards you being frugal. It’s just by bragging more about your frugalness. So for example, if someone likes to make fun of my Freedom Pop phone and saying “Oh, yeah. Your phone is old; how do you even get calls on it?” All I have to say is “Hey, I’ve been using this phone for several years now. And I don’t have to pay a monthly fee for maybe four or five years. Every single year, I’m actually saving like $1,000. You guys can go ahead and spend $1,000 on the monthly fees if you like. Sure, it’ll look more fancy and stuff but I like my position of my phone. [Rolling white board in] Now in the beginning, you know why I said “Everybody should be able to cut off their luxuries and suddenly have 30% of their paycheck for use”? Just check out this Bureau of Labor Statistics Consumer Expenditure Surveys from 1984 to 2012. Now each one of these graphs represents 1/5 of the population. The one furthest to the left is the highest income. And then you get lower and lower income. Right off top, you’ll notice that the bare necessities is the same for everybody no matter how much you earn. Of course, the more you earn=the less percentage of bare necessities of your income that you’re going to use. So you can see the lowest 1/5 of the income bracket (the bare necessities percentage) of your total income has actually decreased, from around 70% back in 1984 all the way down to 60% of your income. Now these are bare necessities such as water, food, shelter, things like that. Even in the bottom 1/5 of the income level, people are still spending some level of luxuries. In the lowest 1/5 here, you can see people are spending around 35% in luxury items. Now, I don’t think this is Gucci bags or anything. But I think this luxury item might be like going out to movies, things that are a little bit luxurious but not absolute basic needs. Now, you might wonder why I bring this up in trying to not live paycheck to paycheck. It’s because I think most people are spending way beyond than what they actually need. Now, in order to figure out what people actually need, it helps to look at this chart; this is called Maslow’s Pyramid. And you have some basic needs at the very bottom and then you sort of build on top from the bottom. You can see at the very bottom, it’s the physiological needs. You need things to keep your body happy. You need water every single day to keep you hydrated. You need food to keep you well-fed. You need warmth so that you don’t catch a cold and, you know, get sick. You need shelter to keep warm, of course, at night and then also to be safe. You also need a certain amount of rest because you don’t want to be working 24 hours a day. In which case, you would just kind of collapse and not be able to do anything else. So these are more bodily needs over here. There are other basic needs which is the safety part. You generally want job security so that you know you’re going to be taking in some income. And having job security–it kind of gives you a fuzzy feeling so that you would feel safe. You’re not going to lose your place of stay. You’re going to keep on having food coming in that you can eat, and water, warmth, etc. On top of the safety thing, you want to have help. So if you’re on a job that is very dangerous, of course, you’re going to lose a little bit of that. You want to keep your health well through exercising, through eating well, through living in a safe place. So bears aren’t attacking you or what not. So when I talk about the bottom of this pyramid, you realize that I don’t list things like cable or coffee or soda or soft drinks or any of those things which I personally consider luxuries. Those things, you can also argue that it’s not very good for you either. Now if you go up further on the pyramid, you have social needs such as friends, family, intimacy. Now generally, if you have all these already, you should be able to obtain all of these other things as well. After you have the social needs, you might want to meet some esteem needs such having good confidence that you are where you are in society. You want to have good achievements that you did something well that you can show others. And you can have the respect of others because of those achievements by other people such as your friends, family. Now beyond that, it’s a little bit even more greedy because you’ve attained all these other things. And you’re like “Oh yeah, I’m sitting around. I have good confidence. I did all these achievements.” Then what else do you want to do? Do you want to express yourself in self-fulfillment in terms of creativity? And a whole bunch of other things. And you can look up the Maslow’s Pyramid to check out all the other stuff that’s related to self-fulfillment. Today, I want to concentrate more of the basic needs. I bring this up because these are the basic needs. And you got to really use this to figure out what are the needs vs. wants. When you look at these things, you can quickly figure out “Wow! You only need water as basic needs?” Food? What’s the food? Is that like steak or something? Warmth? Well, I mean you can have warmth with a little hut, right? And of course, shelter and rest. You’ll notice that if you look at this in detail and then you compare it to your budget, you’ll notice that a lot of the things that you’re spending on is not actually part of these basic needs. Is packaged macaroni and cheese basic needs? It generally is not because yeah, it is considered food but you don’t absolutely need macaroni and cheese. Food here really means the basic things that your body needs to keep itself happy. I’m not talking about eating just bread or whatnot because then you’re going to have a lack in vitamins. But you can actually get very good food for minimal costs and that would already meet your basic needs. You don’t need to eat fast food. You don’t need to eat restaurant food. Of course, if you’re living paycheck to paycheck, you can just cut everything down to your basic needs. And then really figure out what you really want to spend on. One really really easy thing to cut out a lot of expenditure is just to drink water only. Don’t drink all the soda, don’t drink coffee, whatever. If you drink water, well, how much is water? It’s basically free. Just get a filter and filter it out and then you can have all the water you want. Food–If you eat fresh food, eat less meat, eat more vegetables, that’s really going to drastically cut your food costs as well as food planning. Because if you’re not wasting any food, then your expenditure on food is going to be a lot lower as well. So I’m sure you’ll notice that these basic needs does not include magazine subscriptions, fancy sneakers, and things like that. Those are the kind of things that can really make you live paycheck to paycheck as well as trying to finance something all the time. If you don’t have enough money, you finance something. Then you end up paying a lot more for that item rather than just paying cash for it. So I hope this gives you a little bit of perspective on how to not live paycheck to paycheck. You can easily cut out all the luxury items and then all of a sudden, BOOM! You don’t live paycheck to paycheck. And all of a sudden, you have a lot more money to pay off any of your debts if you have any of those. Don’t forget to give me a like on this video. Comment down below. Let me know if that helps you cut down on all your expenses just like that. If you’re interested in supporting this channel, I have an Audible link down in the video description below where you can get a free audio book. 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