What are you willing to do to improve your financial situation? What sacrifices are you willing to make on a temporary basis? What are you NOT willing to give up in the name of saving money or paying off debt?
Your answers will vary depending on your priorities, and they probably will change as your situation changes. Still, I think it’s valuable to be honest with yourself (and your spouse) about where you’re at on this.
– Are you willing to rent instead of buy a house? Downsize to a cheaper payment for a time? Relocate to a cheaper part of town?
– Are you willing to reduce the number of cars you have? Maybe go without a car for awhile, if your city is hospitable to that? Sell a more expensive car and drive a cheaper beater for awhile?
– Are you willing to forego dining out with friends while you get your financials back on track? Maybe opt for cheaper restaurants or limit your own purchases? Or skip it altogether for a time?
– Are you willing to prepare more meals at home, opting for nutrient rich, but simple and cheap dinners?
– Are you willing to sell some possessions that you don’t really need or want for extra cash?
– Are you willing to put a temporary hold on all unnecessary purchases until your bank account improves?
– Are you willing to make do with the clothing you have?
– Are you willing to cut your cable plan and just have the basics, and stream content online instead for awhile?
– Are you willing to take on an extra job to boost your income?
You get my point.
These don’t have to be permanent changes. They really can be temporary. Maybe for a few weeks or a few months while you pay off a high-interest credit card, build your starter emergency fund, or while you finish saving for a goal.
It might sting a little to give up some of those things for a time. But it’s not saying you can never ever go out to eat again. It’s not saying you should always live without a car. I’m not saying you should never watch your favorite cable channel.
I’m saying be real with your situation.
Like Dave Ramsey says, “Live like no one else, so you can live like no one else.” Temporary sacrifices can truly help your finances, and once you’ve met whatever particular purpose you’ve outlined for those sacrifices, you can add those things back to your life in moderation.
On the flip side, if you are not willing to make any lifestyle changes for a short time, acknowledge to yourself that you are slowing your financial recovery. Maybe your situation is such that you don’t HAVE to make cutbacks — it’ll just take longer to meet whatever goal, and you’re ok with that.
Or maybe you have priorities in your life that are more important to you than being out of debt. Maybe you’re unwilling to make any drastic changes to your life, and are content to stay where you are.
Whatever you do — be honest with yourself about it. Acknowledge what you’re doing, and be real about what you’re passing up.
For our own situation, we are boosting our house down payment fund. I project that we’ll have it completed by the end of August if we keep at it and no crazy expense pops up. I’m not willing to make extreme short-term sacrifices to meet that goal ahead of schedule. We probably won’t be in a situation where we need to close on a house much sooner than that.
So while we aren’t spending like crazy, we aren’t saving like crazy, either. We’re eating most of our meals at home, and I’m not making them as cheap as humanly possible. But we are enjoying a meal out here and there. We don’t feel like our situation really warrants extreme frugality.
We’ve been more extreme in the past though, while paying off debt and building savings.
Sometimes that’s what you’ve gotta do to get the job done.
What are you willing or not willing to do?