Get out of Debt SIX Video Course (video 2 of 6) : Identifying Potential Savings
This video is the second in a series designed to help viewers get out of debt by managing their finances effectively. The focus of this video is on distinguishing between needs and wants within the context of personal budgeting. The presenter encourages viewers to be honest with themselves as they review their budget, emphasizing the importance of differentiating between essential expenses (needs) and non-essential expenses (wants).
The video guides viewers through a practical exercise using a pre-filled Google spreadsheet, which includes financial data from the previous three months. This setup helps in identifying and categorizing expenses. For example, mortgage or rent payments are classified as needs, whereas dining out and entertainment expenses are categorized as wants. The objective is to adjust spending habits by minimizing wants, thereby freeing up more funds to pay off debt more quickly.
Throughout the video, the presenter uses examples to illustrate how viewers can make significant adjustments in their spending behavior. Suggestions include downsizing living arrangements or choosing less expensive alternatives for transportation to further reduce monthly expenses. The ultimate goal is to reallocate these savings towards debt reduction, accelerating financial freedom.
By the end of the video, viewers should have a clearer understanding of their financial situation, with a concrete plan to shift spending from wants to needs, thus enabling them to allocate more resources towards eliminating debt. This exercise not only helps in immediate budget adjustments but also in long-term financial planning, such as saving for college or other significant expenses once debt is managed.
