Live Like You're Broke...
Whatcha know about that? Fellow blogger Anne wrote a little on it the other day, and it really hit me - Live like you're broke! Yes, nice & simple, I dig it. I'll probably forget this by next month (you know, A.D.D. and all), but for now let's roll with it ;)
If you were really broke, here's what what would happen:
If you were really broke, here's what what would happen:
- First, you would still live! It would be harder, but it's not like you'd die.
- You'd cut out spending. Because you "can't" spend - you're broke.
- You'd save as much money as possible. You might have to turn around and pay the bills with it all, but you'd still be saving better.
- You'd get creative! Probably the best reason to get in this mindset.
Labels: money management, money quotes
posted by J. Money at
2:58 PM
10 Comments:
Excellent & simple tip... and one that may have just curbed a possible impulse purchase!
I ALWAYS have to remember, "THE LESS I SPEND THE MORE I PAY OFF IN DEBT AND THE MORE I SAVE"!
I've thought about this a few times lately. I wondered if I'd have the discipline to live like I can't spend a dime except on necessary food (meaning no treats but like, oatmeal for breakfast, a PB sandwich for lunch - you know, stuff that keeps you alive.) I've wondered about how much money could be saved and how much of a difference it would make in my situation. Not that I splurge much, but you know - survival mode only - would most people have the discipline to live like they have only enough to eat that day and keep the power on and the rent paid, gas in the car, and nothing else??
My husband and I have gone over our expenses many times asking ourselves, "What would we cut if we lost part or all of our income?" It's a very enlightening exercise that has helped us trim costs, pay off debt and build an emergency fund (not as big as we'd like ideally, but we still have more debt to tackle).
It's a shame so many people don't ask these questions until they're actually in an emergency. I wish more people would realize that if you don't have even a basic emergency fund and/or you can't pay for things without going further into debt then that IS an emergency!
I have some caveats, though. Don't "live like you're broke" at the expense of long-term health, finances, career success, etc. When you're truly broke, you might not have a lot of choice about those things -- but hopefully it is a very temporary situation. Also, while cutting out expensive habits can be great for your wallet, do actively look for free -- or even reasonably priced -- things that make you happy. Feeling deprived is one thing when you know that it's only for a few weeks or months, but it's not a key to long term success.
#4 is the key. When you don't have a lot of money and really want or need something, it forces you to think outside of the box.
When I was in college or grad school, and just starting out, I was crazy skint. It was simple: I didn't have the money, so I had to figure out a way around that obstacle or go without.
I look back now and can barely believe the stuff I did! This day and age, now that I have an EF and live off of half of my income (I actually live off a little more than I did in grad school!), I do things very differently. It's nice not to have to really worry about money as much as I used to, but I do miss the feeling of accomplishment when I found a way around spending too much. These days, I'd just throw money at the problem and it's solved...not so proud of that method.
For example, I moved to CA 5 years ago with two suitcases, no job, no friends, and about $2K to start me off. Normally, I'd stay in a hostel or hotel and rent a car, but I knew my $2K would last me about two weeks if i did that. So, I went on craigslist, found a house/car/pet-sitting gig, and had my accomodation and transportation covered for the first month I was in CA and getting settled. I'd NEVER do that these days!
I have this same thought from time to time. I think of something we spend money on -- like satellite TV -- and realize we could be spending it on debt.
Then I think of all the entertainment it brings us and how it keeps us in when we'd otherwise be dying to go out (and probably spend money doing so). That's when I realize, if it came down to a matter of sinking deeper into debt, we'd cut it. But for now, it's a luxury we allow.
That said, I think it's a useful lens to look at your spending/budget. Once you realize just how many things in your life are luxuries, you're better able to say no to additional ones. It also reminds you that, if worse came to worst, you still have a lot of flexibility with bills. Sometimes it's good to know that you could pare back a lot further, even if it's only so that you realize what you don't have to give up.
Great advice! Very.. hmm. Unorthodox, I guess, is the term. But still great advice.
As someone who is broke, it is definitely an eyeopener. I have learned all sorts of things and handle money differently that I have in the past. It will be interesting to see what "sticks" and what doesn't once my situation turns around.
@Matt Jabs - You got that right brotha.
@444 - Anyone in survival mode would get muuuuuuch farther for sure - you have no other choice, right? it's def. do-able for any of us to get our spending/saving set up like that, but w/out the motivation (and pure laziness on our part) it's just hard to do ;)
@Meg - Well said! Playing "broke" for long-term will surely throw you off track no matter how good or not you are at it. Unless you are forced to, It's worth figuring out which parts of your life would benefit from it, and which wouldn't. After all, the whole point of managing money well is to be HAPPY! So if acting like a vagabond doesn't do it for you, then stay away ;)
@Sense - Hah! Same here - I moved to NYC with 3 suitcases, $2k in cash, and 2 friends :) Shared a 3 bedroom 1 bath condo (from craigslist) with 6 people, and then headed back to DC when I ran out of money and missed my friends/family. I feel like it's easier to do when you're young and more naive? I certainly couldn't do it now a days, but I sure wish I had that mindset again.
@Abigail - Nicely put :) I'm a-okay with enjoying luxuries, as long as people don't go overboard and get themselves in even deeper trouble.
@Imee - we like Unorthodox, keeps us on our toes ;)
@Dawn - I'm glad you chimed in Dawn - always impressed with the way you handle things! I'm sure you won't keep *all* methods going when you're 100% on track, but i bet you keep most of them. you're awesome :)
I really need to go back to living like this. I have the money to live like I have been (going out to dinner, going to the movies, buying myself a Wii) but I could be saving so much of that and still be a happy camper. Now it is time to REALLY cut back on that extra stuff!
I can't remember a time when I did not live like I was broke, even when I had money and no debt. I honestly think I am wired to constantly save money which is why I liked your post about when saving money goes too far. That is often the case with me, but I am trying to learn how to balance saving money and spending money. However, I do and will splurge on vacations and concerts. So i guess I live the 'broke' life until something I really want comes up.
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