For most people, money is gone at the end of the month or sometimes even in the middle of the month. Money just never seems to be enough sometimes.

It is no longer possible to save money or even save for holidays. Instead, people are turning more and more to financing and even to a loan or an installment payment for the holidays.

This is the worst thing you can do. It pulls you even deeper into the vicious cycle of debt and prevents you from getting out of it. The reason why there is not enough money at the end of the month is that most people spend more than 70% of their income on 3 things:

#1 Housing

Most people simply pay too much for their rent/mortgage. Of course you want to feel comfortable in your living space. But there’s one big rule you have to follow; you can’t spend more than 30% of your gross monthly income on it. Iit would be even better if you could go below that.

If you pay 25% of your net income for rent/mortgage, you will undoubtedly already set yourself up for financial success. Do you really need all that space? The smaller the space, the less you have to pay for utilities and insurance, which saves you even more money!

Even billionaires like Waren Buffett try to keep their cost of living very low. That is why they live in a house that is very modest by their standards.

#2 Transportation

The second biggest problem is your car. Here you can save a lot of money again. The first question you need to ask yourself is: Do you really need it? If you live in a big city, you can use the subway or bus. It is not only much cheaper, but also better for the environment. In fact, you will get to your desired destination much faster especially with the insane traffic.

However, if you really need a car, then don’t try to get a new car. Because when you leave the dealership, your car has already lost 20 to 30% of its value. If it really has to be a newer car, then look for an demo or company car. These are also almost like new cars and only have a few miles on them. But they are much cheaper.

However, in general, I recommend you to buy a used one, because it is of course much cheaper. At the same time you should look for cars that are very robust and therefore rarely need to be repaired. Toyotas and Hondas have incredible reliability and very high resale value. My Toyota Rav4 now has over 250k miles and drives almost like new.

Additionally, you should also shop around for insurance policies before buying a particular car, as they differ greatly from make and model. In this way you can save a lot of money again.

#3 Food

The last big problem is food. It’s easy to spend a lot of money on food every month; however, you can also save a lot of money. The big factor here is eating out.

Of course it is nice to eat out. They serve you and you have a good time. But it is also very expensive. Why not invite a few friends and cook and eat together at home? This is usually much more fun and saves money.

You can also save a lot of money if you go shopping at the supermarket. Often the only difference between branded and discount products is the packaging and the quantity. So you pay more for branded products and get less at the same time. Even if the content in discount stores is exactly the same.