Posts Tagged ‘drink’

I recently decided to quit my job, move to a tropical island, and start my own business. You can read the full story here. While I actually came to this decision quite easily, it required getting rid of the majority of my stuff and relocating my entire life. However, due to my financial situation this was actually quite easy to do and going through this process has really taught me what financial freedom means. There are a lot of books (several of which I have read myself) and sophisticated methods out there to tell you how to get out of debt and become financially free. After successfully creating my own financial freedom, I can honestly say it’s not that difficult. It just takes a good plan and some perseverance.

The Method

The first thing you need to do is honestly evaluate your situation. If you are deep in debt, don’t pretend that things are going well. This won’t help you get out of the situation. Add up your debt and bills and also figure out how much you bring in. You need to figure out how much is going in verse how much is going out.

The goal is to put as much into savings as possible. However, you must first pay off your debt. To pay off your debt, you must first free up some of your funds by reducing your spending. Look at your bills and find what you can go without. It may not always be the large things. Do you drink coffee everyday? That right there can add up to more than $20 a week or more. Also consider things such as cable or satellite TV, reducing your cell phone bill, buying store brands, eating or drinking out less, and of course driving less. These things may seem small, but when added up they can become several hundreds of dollars a month.

The next step is to look at the bigger items that you are purchasing. Whether it is clothes, electronics, DVDs, or anything else you might lay your eyes on. You must learn to realize that you can live without it. It is very difficult at first, but if you can do it for a while it gets much easier. One thing I have found that helps me is think that I have a very limited space and that I will soon be moving. Another is to keep yourself busy with other activities. And of course, don’t tempt yourself by going window shopping.

Now that you have lowered your expenses and freed up some cash, the next step is too put that money to paying off your debt. Start with the highest interest rates and work your way down from there. The quicker you pay it off the more money you save.

Now that you have paid off your debt, you will the original payments you were making each month plus the extra you were paying towards your debt by reducing your bills. This can now all go towards savings. I give my self a spending allowance each month. I take it out at the beginning of each month to make sure that I am not tempted to spend more. At first this amount was my spending allowance only. The food I used for lunch was a separate amount. I then decided that I could cut back my spending to include my lunch in my spending allowance as well. This allowed another $200 a month to go to savings.

The Results

After a year and a half of this program, I was able to save enough money to have a strong amount of savings in one account towards retirement, and also enough money in another account to quite my job and move to a tropical island and start my own business. Figuring the costs of expenses, I will be able to live for more than a year without any income at all without touching the money in the first savings account. I am by no means rich, but it is the first time in my life, where I can really think about what I want to do and not have to worry about paying my next months rent and bills.

After a really cool June, we have finally had our first feel of summer here in Tokyo. And while we don’t have a 4th of July weekend like the US, I figured a would give 5 things you can do that will keep you out of the heat, on a small budget, and having fun. The big key is to get out of your own house so you don’t have to run the AC.

1. Go to Karaoke- Most of us love to sing, and if you search around you can even find great deals during the weekend. There is a place near me that costs about 1,000JPY (about $10) for all day on Saturday or sunday) and it comes with a free drink. It would cost that much to run your ac for a couple of hours.

2. Take a train to the Ocean- One of the nice things about living in Japan is you are always close to the ocean. Even if you don’t like to swim, you can get away from the city to relax and enjoy the cooler temperature near the ocean.

3. Activities in the park- Let’s face it, when it gets hot and muggy in Tokyo you are gonna sweat. So why not have some fun and get some exercise out of it.

4. Spend a day visiting art museums and other cultural spots- Most are cheap to enter, they have air conditioning, and is very relaxing. Many also have small cafes where you can have a meal or a cup of tea.

5. Visit the local mountains- Since Japan is made of mostly mountains, there is always one close. You can get to a cooler temperature, get some exercise, and have a great view.

Set a budget to make sure that you don’t overspend and stick to it.