The one part about turning around your personal finance situation that everyone dreads is the cutbacks.
It’s easy to see why. Your normal, everyday life is what has led you to this financial corner. In order to turn the ship around, you’re going to have to make some changes to your normal, everyday life.
People don’t like changes.
Even people who seem to have the most carefree and the most varied lives have lots of patterns and routines in their lives. They like certain things. They prefer certain activities and foods and drinks.
Human beings are all about routines and patterns and the mere suggestion of seriously altering those routines for very long seems rather dreadful.
What makes it even worse is that the first things people imagine cutting are the things that they know are non-essential but that they also deeply enjoy.
That one thing is different for everyone. For me, that thought revolved around books – it always has, and it probably always will. Even now, I don’t like to think of completely cutting myself off from ever buying another book.
Here’s the catch, though. Most of the time, cutting that one thing isn’t going to help much – and it’s almost always going to do more harm than good.
Your cuts shouldn’t begin with the things you truly care about, and the things you thought about first are probably things that you care deeply about. Instead, look at cutbacks in the areas you didn’t think about.
Did you think about the brand of laundry detergent you buy? No? Then go cheap on that one (or even make your own laundry detergent). You can probably do the same with most of your household products, so dabble in the generics and store brands!
Did you think about your car? If you didn’t, stick with the one you have until failure is eminent, then replace it with a late model used one.
Did you think about your haircut? Shop around for an inexpensive salon or barbershop – or try cutting it yourself.
Everyone is going to have a set of things they really care about and a set of things that they don’t care about.
For some, there’s a third group – things that seem like they should care about. You might get an instinctive response in your gut to not cut certain things… but you didn’t really even think about cutting in those areas before you read about it on a tip list. Ignore that immediate gut reaction and try cutting those things. My experience has been that those kinds of gut responses have more to do with product marketing than my own actual life experiences and that cutting back doesn’t really hurt at all.
When you begin to realize that cutting back on some areas of your spending doesn’t really hurt at all, it becomes much easier to experiment with cutting back in all areas of your life… and when that happens, you suddenly have tons of money to pay off debts and save for retirement.
Don’t start with the things that seem important, though. Start with the less important things and work from there so that you can see how painless saving money can be.