Instead of paying for cable TV, he spends $8 a month to get movies streamed to his computer via Netflix, and he watches free TV shows and movies online via Hulu.com. A sports junkie, Pressley watches live games on his smartphone with apps such as the CBS Sports mobile app, saving him about $500 a year, he says.
Another way Pressley has cut costs is by forgoing a landline telephone. Using Google Voice, he set up a business phone number that directs calls to his cell phone and allows him to make free domestic calls within the U.S. “I estimate an annual savings of at least $800 by using my cell phone or Google Voice to make personal and business calls,†he says. Altogether his expenses now total about $2,000 a month, down from more than $3,000. While his business is currently bringing in about $3,000 a month in revenues, the company has yet to break even, so Pressley is still living primarily on his savings. Initially he used some savings to cover startup costs, but now he invests his earnings back into the business.
For Pressley, living within his means is a lifetime commitment. He devised a 30-30-30-10 rule and says that even when his disposable income grows, 30% will go to savings, 30% will go to retirement, and 30% will be invested. Only 10% will be allotted to discretionary spending. “I’ve been finding creative ways to do things,†he says. “For example, free museums for entertainment, using the metro when gas is high, and maybe waiting for Restaurant Week before going to that expensive restaurant.†He’s also given up the last-minute trips and stopped frequenting nightclubs.
Pressley’s primary goal is to grow his business to the point that it not only supports his lifestyle, but thrives and eventually employs others. “Living within your means doesn’t mean you can’t have nice things,†he says. “It’s about using your money as a tool to get where you want to go.â€
HOW HE DID IT
- Align spending with priorities. Before you can find ways to cut spending, you need to know what you’re spending money on. Take a couple of weeks to track your expenses and “You’ll probably find that you’re spending money on things that aren’t even that important to you,†he says. For example, Pressley didn’t miss going out to nightclubs. Add remaining priorities in moderation to your budget. For example, if you value travel, save up for a trip you can drive to, or if you like socializing with friends, invite them over for a potluck dinner rather than eating out.
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