domenica 26 gennaio 2014

How to Trim Expenses without Losing Things You Enjoy

This website is for entertainment and educational purposes only. Material shared on this blog does not constitute financial advice nor is it offered as such. Therefore, The Simple Dollar assumes no legal liability for the completeness, accuracy, or suitability of the information provided by its authors.Readers will also note that The Simple Dollar maintains financial relationships with certain third party merchants. If readers access and utilize the services of one of these affiliates through a link on the blog, The Simple Dollar may be compensated for the referral.Please read the blog’s policies on privacy and image-use.And always consult a locally licensed insurance agent, financial adviser or certified attorney before making any financial decisions.

via The Simple Dollar:

As I’ve mentioned before on The Simple Dollar, I spent a lot of 2006 and 2007 cutting major expenses from my life.

During that period, my family’s finances were in peril, so I felt a strong need to come up with every single dollar that I could. The solution was to cut my spending, then cut it some more.

Almost every type of non-essential regular purchase that I made went under the knife. I’m deeply passionate about books, but I dropped my book spending to virtually nothing. I stopped buying DVDs and games, too. I cut out my stops at the coffee shop and meals eaten out.

The most common response I hear from people when I tell them about this was, “Didn’t that make your life miserable giving up so many things that you enjoy?”

Here’s the thing, though. In the end, I didn’t really give up anything that I enjoy. What the cutting experience taught me is what it is about the things in my life that I actually enjoy. I didn’t cut those things. Instead, I trimmed away the other elements.

Let me give you some examples so that you’ll understand what I mean.

I love reading. I love the feeling of having an unread book or two next to my bed. I also love getting lost in a good book.

Over time, I discovered that buying a new book really triggered those feelings of gratification, so it became a routine for me. I’d buy a new book or two every week and put them on my bedside table.

When I cut everything heavily, I began to realize that I didn’t have to own the books to get this feeling. If I simply got them from the library, I retained the pleasure without the expense.

Here’s another example. I really enjoyed going to coffee shops. Doing so had become a daily routine for me. When I cut everything heavily, I cut those coffee shop visits completely out of the picture.

A month or two later, when I met a friend at a coffee shop, the experience was really enjoyable. It didn’t take me long to realize that I was actually diminishing my enjoyment of coffee shops by going there every day. Doing it every day took something fun and made it very… ordinary.

I deeply enjoy stopping at a coffee shop as a treat, but as a daily excursion, it loses the magic. I could just as easily get a beverage in my own kitchen.

Basically, whenever I cut something from my life, I ask myself a few questions.

First, do I actually miss this thing that I’ve cut? Sometimes, I’ll find that I’ve changed as a person and that I don’t actually miss the thing I’ve cut out of my life. In that case, it’s pure savings.

Second, is there some way to continue this experience for free or at a lower cost? It doesn’t have to be an exact duplicate, just something similar. For example, I swapped bookstores for libraries. In that process, I realized that the thing I loved was reading books, not buying them.

Third, if I do miss something, do I lose anything by doing it less frequently? Does my life collapse if I reduce the number of times I go to the coffee shop or the burrito restaurant (which was one of my lunch-time treats)? I found that reducing the frequency of such treats made them stand out more and become more “special.” By making the ordinary as cheap as possible, the occasional treats really stood out as something extraordinary, which added greatly to the pleasure.

Fourth, are there low-cost or free activities that I now have space for in my life? Our town has a bunch of free walking and biking trails, a free tennis court, and a free disc golf court. I was not aware of these services until I stepped back from all of my routines and looked around a little bit. Then, I made room for these things in my life and found new things to enjoy, things that didn’t cost anything.

Sure, I missed some of the things that I cut out of my life. When I found that I still missed routines even after I looked at them in this way, I just brought them back. Frugality fails when you’re miserable.

The key is to trim away the things that actually turn out to not be all that important to you, and it’s often hard to tell which is which until you cut it for a while and see how things shake out.

The post How to Trim Expenses without Losing Things You Enjoy appeared first on The Simple Dollar.