Talk of inflation is all over the news. Worries about a recession are not far behind.
Blog posts are popping up all over to deal with money crunches, and I am sure we will be seeing more. Some posts will be about earning more, and many will be about cutting back on unnecessary expenses.
For those who aren’t confident they can earn more money, cutting expenses can be a quick win.
It’s relatively easy to go through your spending and cut out costs you don’t really care about: subscriptions to a magazine you don’t enjoy anymore, the gym membership you never use, and so on.
A little harder is cutting costs for things you do need: renegotiating your phone bill, or switching cable (or internet) providers. It takes a little effort, but will pay off for months.
You may choose to accept the harder challenge: to “cut expenses until it hurts.” “Be ruthless,” and give up services and treats that you enjoy. Coffee shops, restaurants, new clothes, vacations, all on the chopping block.
You may even go to the next level: sell the car, take in a roommate, move to an area with a lower cost of living.
This can be a lifesaver if you lose a job and have a significant reduction in income, or speed a painful debt payoff journey. If you are motivated, you might use this technique despite not having a financial emergency, with the goal of supercharging your savings in order to grow your wealth faster.
However, much like the general tenets of minimalism, it is important to remember the second half of the challenge: once you have cut down your spending, reassess and add back what you really miss.
Sometimes, if you have enough money and were just souping up your savings rate, adding back what you love is easy. You decide it’s worth the money, and you can open up your wallet.
If money is still tight, you have to get more creative. Maybe you find a cheaper option (can’t replace your cut and highlights with a home cut by your spouse? Stop by the beauty school), or perhaps you decide it’s time to pick up extra hours or a side job to pay for your luxuries.
Just don’t build your financial plans relying on a life of self-deprivation. It’s usually not sustainable, and even if it is, if a plan doesn’t give you a life you enjoy, it’s not a particularly good plan.
What expenses have you given up with little regret? Which elective expenses do you refuse to drop?