Are you willing to sacrifice?
Last week’s money mailbox featured a long time reader who was running out of money. One of the steps seemed obvious to many outsiders who saw the situation clearly: cut that cable and save at least $50 – $100 a month. It was easy for us to make the suggestion, but it must be very difficult for the elder lady. After all, watching cable television was one of the few activities she still enjoys.
Cable is one of those services that I constantly tell everyone to cut down. That $100 cable bill, while a big waste of money, is affordable for many of you. When I talk about it, some of you always retaliate and I back off. I do it because you are right. You can afford the monthly cost, and this is just a personal choice.
But before you write everything off as “I have the money and it’s my choice”, please consider what you are risking.
- What if you were laid off?
- Or worst yet, disabled and cannot work for a long period of time?
- The stock market seems to be having wild swings again. What if your boss checked his investment portfolio over the weekend and decided again to cut everyone’s salary?
Is the cable bill that important to you? Or actually, are any of the stuff you bought recently worth more than your happiness?
I’ve been fortunate that I believe frugality isn’t at all a sacrifice, and I write about ways to save as if it’s given that everybody else also agrees there is no problem not ordering a soda when they dine out. The fact of the matter is that not everyone automatically thinks that soda is expensive. Frugality can be hard. The:
- more expensive TV does have more features.
- higher end purse is made from higher quality material.
- more costly pair of shoes do look nicer.
So what if you want to save but just can’t bring yourself to do it because you see everything as a sacrifice? Here are a few suggestions on where to start. These help me re-emphasize the importance of frugal living and why it isn’t a sacrifice at all.
Look at Your Past
Every once in a while, I would take everything I bought and go through them and actually try to figure out what I got out of the purchases. How long did the initial excitement last? Did my life actually become better as a result? For some things, the purchase did improve my life. But the majority of the time, stuff that I buy never made a difference long term. Go through the exercise a few times, and I didn’t feel like buying much unless there was a need anymore. Ironically, I became much better positioned financially to splurge whenever there was a need because I just don’t splurge as often.
Look At the Big Picture
Seeing is believing. You may not see the difference of one purchase here and there, but I encourage you to try it anyway because the expenses all adds up through time. Eventually, you will realize that because you are frugal, you are living more comfortable than others. You don’t need the same amount of money to feel as happy, and at the same time, you have more money too. You probably have a better eye for value, and when you do need to spend more to get the better product, you can actually afford it.
The path to financial freedom is not rocket science. Just try to build wealth one step at a time, and you will never have to make tough choices ever again.
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{ read the comments below or add one }
I have always been a firm believer in making cuts wherever they have to be made in order to get things back on track when it comes to my money. I have cut cable, started it up again to cut it again….and until I am completely debt-free…that’s how that’ll work. But with anything, internet, minimizng the use of my v8 Dodge(….) to cut back on gas, done a meal plan to limit overspending on food, etc. If you want financial freedom, you’ll do whatever it takes.
Your final point is a very good one. Looking at the big and long term picture is what wealthy people (and people building wealth) do. We don’t advise our clients to make specific cuts. We arm them with the facts and knowledge of what their spending is really costing them long term and let them decide if the expense is worth it. For some people cable is a high priority. We find a lot of middle-class Americans paying thousands for services they don’t use, like gym memberships. If they are using the membership and getting good value, then great keep it up.
One choice my family makes is we only join our local Y for the summer months. I work out 3-5 times a week and we go to the pools 3-5 times a week. We also cut the cable during that time because we have very little time for TV during the summer. We don’t do this because we’re poor either. We have no debt, a huge financial safety net, our net worth is several times our gross income and our home will be paid off in 2013 and we have a strong income. We also give generously. We just are not interested in waisting money anymore.
It is all about educated choices.
Its a matter of discipline. Just like those health stories that say adding a doughnut a day can add 15 pounds (or something of the like) to your waistline in a year, adding a small expense to your budget every day can add up to something significant. Conversely, reducing your expenses can make a big difference – but you have to have discipline.
Life is to enjoy, but part of enjoyment is being able to have peace of mind regarding future expenses – such as retirement, kids college, emergency fund, etc. Live within your means, and applying discipline on a day-to-day basis helps. It doesn’t mean making your life unneccessarily difficult, it means being able to take care of needs, and separate them from wants.
I’m happy to work at McDonald’s again if I lost my job and needed income. There’s almost nothing I wouldn’t do.
I would get rid of cable in a heartbeat (granted I’m not a big fan of TV in general) but Netflix is $10/month and streams movies and TV. Chances are for big events, sports or Oscars for example your friends will have cable or you can go to a bar and watch. $4/pint is still way cheaper than $100/month.
Recently cut cable and I could honestly say that I don’t miss it too much because I have hulu now. Saving lots per month just by cutting cable. Thinking about downgrading my phone plan as well since we don’t use all the minutes.
Great article, and honestly, im one of the people that wouldnt get rid of cable. I would cut every other discretionary expense,( dining out, landline, high speed internet, etc) before i would cut cable. Because i watch tv everyday, it is actually one of hte few expenses where i get more out of it than it costs me.
It is true that seemingly low value purchases can go a long way in disturbing the whole financial roadmap. We often do not realize them making those instinctive purchases which may not even be useful to us down the line.
There is a thing line between Investment and Splurging which one needs to master
i am a believer of the end justifying the means. If i want somethings in the next n years i will be willing to sacrifice whatever i have to in the now. The problem sometimes comes in eh discipline part; keeping true to that sacrifice. It all depends on how badly you want something