You’ve heard it before and you will definitely hear it again: stop buying lattes; bike to work; never buy new clothes. I disagree.
I believe that you can reach your financial goals without sacrificing your lifestyle.
If you love Starbucks, drink it. If you’re lazy and love it, don’t make your commute miserable! If you care about fashion, who am I to stop you? I don’t think that any of these things keep you from reaching your goals.
It’s really just a question of priorities. Here’s my not-so-revolutionary proposal:
Spend more on things you care about, and less (or not at all) on what you don’t care about.
I care about high-quality produce, living in an apartment with lots of windows, and international travel. I don’t care about wearing super on-trend clothes, attending sporting events, or buying fancy toys or accessories for my dog (she much prefers belly rubs and long walks). I try to spend my money according to my values.
I frequently hear advice that glosses over what I consider the most important part of lowering your expenses: identifying your priorities.
- When does spending money feel like an investment?—in your career, personal growth, happiness, health, or relationships?
- What kind of purchases do you feel good about the next day? The next week? The next year?
- What do you spend on that leaves you feeling guilty, lonely, frustrated, or ashamed?
Remove negative purchases from your lifestyle, and you’ll feel more confident and at ease—plus you’ll have more funds to allocate toward purchases and goals that you actually care about. You work hard to earn money—it should improve your life, not create stress.
Once you identify your priorities, you can start living by them.
Regain Control Over Every Dollar
Start by calculating how much money you spend expenses you don’t really care about every year, and come up with a few ways you can repurpose those dollars to reach your goals:
- Paying the late fee on every book, Zipcar, and dress you rent because you can’t be borrowed to set calendar reminders = $20+/month = $240+ = money toward your new car fund.
- Mindlessly buying a t-shirt whenever you wander into an Urban Outfitters = $30+ shirt/month = $360+ = a plane ticket for your dream trip next year.
- Ordering one last $10 cocktail each Friday night = $40/month = $480 = a huuuuuge boost to your Roth IRA. That $480 is actually worth more like $5000 if you keep it invested until you retire!
Then, look at the expenses that you’re on the fence about. You’ll know this is where you want to be spending your money if you answer “yes”:
- Taking a taxi home from the bar every Saturday = $15/week = $780/year = a safe end of the night + extra sleep on the weekends. Is it worth it?
- Buying only organic, local groceries = an extra $50/month = $600/year = health benefits + environmental benefits. Is it worth it?
- Living in an apartment with a doorman and an elevator = an extra $300/month = $3,600/year = lets you be a little lazy + easy to receive packages + keeps you safe. Is it worth it?
Some of these expenses may seem insane to you, but that’s why it’s so important to come up with your own priorities before listening to generalized advice.
To be honest, I drive myself a little crazy with these questions. I love me some fancy farmer’s market tomatoes, but are they worth the extra $2? Multiply that by 52 weeks and all of a sudden I could be adding an extra $100 to my Roth IRA every year!
If I did this for every purchase I would never get anything done. I use these questions as a thought exercise to be mindful about my spending, but I don’t beat myself up. If I notice a trend in overspending or I know I regularly feel guilty when I come home from food shopping, I take a step back and make a more specific plan (like buying farmer’s market tomatoes, but not the fancy ones ;)).
Subscription Services Are Not the Devil
Everybody raves about canceling subscriptions to save a bunch of money, but that’s not necessarily the right choice for me (or you). If you love lifting weights and using the elliptical machine, don’t cut your gym membership! If your idea of a perfect weekend involves reading the Sunday Times, don’t cancel your newspaper subscription.
On the other hand, if you only got that gym membership because you thought you “should” start working out at a gym but you never use it, maybe it’s time to try something else. If newspapers are piling up in your driveway, accept that you prefer Buzzfeed lists or online news to physical papers.
It’s true that canceling a subscription or membership is an easy way to cut spending—but that doesn’t necessarily mean it’s the right way for you.
If You Do Want to Cancel A Subscription…
Cancel it immediately. Right now. Go! You can almost always do this online or *gasp* over the phone. You’re reading this online, so I know you can do it now. This will take you less than five minutes, and probably less than two. If you wait, it becomes easy to make excuses all month until BAM! the next monthly charge is made, and you’re kicking yourself.
If it’s a frequent non-subscription purchase that adds little value to your life, creating a system tailored to your style will help you stop spending.
- Promise yourself a reward for sticking with your goal—then actually give yourself the reward when you do!
- Announce your big switch to a friend who’ll keep you on track (accountability is my favorite behavior-change strategy).
- Set daily Google Calendar reminders to keep your goal front-of-mind.
- Do the 2016 equivalent of a Post-It note on your computer by adding a sticky to your inbox or changing your phone background.
Set Your Own Pace
You’re in this for the long haul, so the important thing is to make changes you can maintain. I’ve been most successful if I make changes one at a time. I prefer to start with the biggest money-savers first so I see results quickly. Or, you can start with the easiest changes, or the ones you won’t notice very much. Whatever works for you!
Remember: ruthlessly cut spending in areas you don’t care about so you have more to use on what you love.
I want to hear from you! What do you regularly pay for that other people think is crazy? Let me know in the comments below 🙂