Cut Spending Without Feeling “Pinched”

Unless you live entirely off the grid, you know that inflation and interest rates are on the rise. The news brings the daily chorus of financial analysts gloomily droning out their prognostications of recession. Even the unprecedented job market seems to be flagging, if not as badly as the stock market. That chill in the economy and air, may signal it’s time to think through your spending habits.

As most everyone knows, I don’t “teach budgeting.” I do teach how to manage your money by focusing on decisions that bring growth professionally, personally and financially. Part of that means paying attention to habitual spending, and knowing how to readily reduce personal costs. Here is how to cut down on spending, without feeling pinched.

1. Acknowledge that change is hard. Most people believe that eating healthy is hard; paying down debt is hard; making friends is hard. What’s interesting is that “hard” is not universal. What is difficult for you, may be (or seem to be) easy for another person. What is universally hard is change. With all change comes loss, and we are all loss-adverse to some degree. Whenever you make a change, you will feel resistance, even if you know it is for your own benefit. The best approach is to acknowledge that change is hard, and show yourself compassion. 

2. Focus on yourself. Theodore Roosevelt was right when he said, “Comparison is the thief of joy.” No one else is in your exact situation; enjoys your personality and tastes; or understands your deep interests better than you do. Before you turn to the internet for answers, see if you can find smaller spending areas that you know are either fast and easy to cut, or definitely not on the chopping block. For myself, I much prefer to eat more meatless meals to constrain food costs, than cut out going out to eat for date night. In fact, my family is thrilled we now eat homemade pizza and grilled cheese routinely, so I’m not entirely sure I can argue this even counts as a “loss.”

3. Plan ahead for easy cuts. Planning ahead helps you mitigate the discomfort of change and loss. We all experience problems with cash flow and income. We all experience a shifting economy. The key is to plan ahead what you can cut. This introduces a feeling of safety, and is the key to not feeling “pinched” when you reduce spending.

4. Try different methods of managing and cutting spend areas. You can manage your money whatever way is comfortable to you, and cutting down on spending is no different. Experimenting with different cost management methods, gives you the opportunity to adjust your spending in a way that feels right for you.

• Reduce purchase frequency. Changing the frequency you purchase something is one of the easiest ways to save money, because you still get to enjoy the item itself. For example, if you order lunch out most days, try ordering out twice weekly instead.  
• Extend what you have. Extending what you have is great for services you may purchase. If you love pedicures, bring in your own polish, so you can touch up, and extend the service longer. Extending is different than reducing frequency, because you are enjoying the item/service longer, not skipping a session.
• Cut something that you don’t care about. In our family, pizza and grilled cheese are beloved. I’d rather eat something else, but not being a huge foodie, I’m just happy for a simple meal the kids don’t fight over. Find something you don’t care about, and stop buying it. This is a good rule to establish and review as part of your financial routine.
• Go high-end. Going “high-end” on a single big item is a good technique to reduce mindless spending. Many women use this in the clothing category. Instead of purchasing 3-4 cheaper sweaters, buying a single higher-quality item, can ultimately save money. Just compare prices to ensure this makes sense.
• Use up. Use up food items in the pantry, before you buy more. Use up your shampoo and conditioner before you purchase more. This is a better bet, even if you find a buy one, get 50% off deal. 
• Go cold turkey for a month. Try limiting all but the most required spending for a period of time. If you’re not sure what to cut, going “cold turkey” on spending is an easy way to see what you notice. Add in the things you notice, and stop buying the things that you realize didn’t matter so much.
• Negotiate a better deal. Negotiating a better deal, either by shopping around, calling your lender to find a lower interest rate, is an incredible way of reducing costs. 
• Ask for a discount. Practice asking for a discount (consider 10%), even at chain stores, to save yourself the trouble of lower spending. Tim Ferriss reported that when he tried this, nearly 70% of retailers gave him some kind of discount. My conversion rate is 35%, but that’s still about one out of three vendors.
• Give away. If you just love shopping, try giving things away instead. Research demonstrates that when you give away items, you receive the same pleasure response as when you purchase something, with the added bonus that it last longer. 

If you try these, please let me know how it worked. Please share other ways to cut spending without feeling pinched. We’d love to hear from you. 

Image: Photo by Erol Ahmed on Unsplash