July 28, 2011, 6:00 am

Could You Decrease Your Lifestyle Spending?

by: MD    Category: Assets and Net Worth
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Could You Decrease Your Lifestyle Spending?

An older friend came out for drinks with us the other night. He was being very generous, he kept on ordering rounds, and would refuse to let anyone else order the drinks or pay for them. I finally got fed up with this because I don’t like it when someone spends money on me. He explained to me that he worked hard his whole life so that he can be in a position where he earns lots of money and can afford the simple pleasures in life (covering drinks for everyone).

Mike reviewed his 2011 financial goals the other day. He mentioned that he wasn’t stressed out about his credit card debt because he knew he would get a nice bonus at the end of the year.

What I’m getting at is that when you work hard and earn a good chunk of change it’s really easy and rewarding to increase your lifestyle and enjoy yourself.  When you’re successful and making lots of money, it’s feasible to spend money.

I wanted to play Devil’s Advocate today and look at the other side here. My question to you guys today is could you decrease your spending/lifestyle if you were to lose your job or if you were forced to?

This is a tough one to answer. I know personally that it would be challenging for me to cut out certain things from my lifestyle if I needed to right now. It’s simply to theorize about cutting down on certain expenses. The reality is that most cutbacks would have a negative impact on my lifestyle that would be difficult to accept. Let’s go over the factors involved in decreasing your lifestyle spending:

Could you embrace frugality?

Could you be frugal if something were to happen and you really had to save money? When you’re making good money or have few responsibilities you don’t exactly have to be frugal and tight with your finances. What if you had to be frugal? Would you be ready?

I would consider myself to be frugal in some areas of life. I don’t like to pay for things if I don’t see any value. I don’t like to  feel like I’m being ripped off either. On the other hand, when I see value in something (a trip for example), I don’t mind spending the big bucks.

Could you cut out the luxuries?

I really enjoy my luxuries. I enjoy my fancy smart phone. I enjoy my trips. I enjoy my MMA gym membership. What if you had to decrease your lifestyle spending by cutting back on the luxuries? Which luxuries could you cut? Which ones would you really miss?

I think that I would really miss my smart phone and driving every where. I’ve taken the bus around town for many years. I’ve spent many cold winter mornings freezing at the corner waiting for the bus hoping that it comes before I freeze to the ground. Now I enjoy being able to drive wherever and whenever I want.

Is spending money the reward for making big bucks?

Do frugality zealots just not earn enough money? I find that the harder I work to make more money, the more rewarding it feels to spend some of this money. What would be the point of always working if you can’t have a decent lifestyle? Working hard for your money would definitely make lifestyle deflation tough.

Sam of Financial Samurai once wrote that there’s no point to making money if you don’t spend it. I agreed with the article because life really is finite. Once you take care of your expenses and main savings, it’s okay to splurge money on yourself. This is why I might not be so good at decreasing my lifestyle spending.

Time to ask the readers: What do you think? Would you be able to decrease your lifestyle spending? or would you find other ways to make more money?

(photo credit: rawartistsmedia)

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Comments

I always budget so my recurrent expenses never exceeds 50% of my monthly income. I’ll clear a debt before incurring another one.

I don’t have many recurring payments except basic needs (house payment, utilities, insurance.. and so on) so cutting down on those would be hard.

Since most of my other expenses are cash only, I wouldn’t have trouble cutting the lifestyle to be honest. For a while that is…. because frugal is great and all but come on… I wanna live 🙂

I would definitely work on a plan to increase income if it ever felt trapped in too tight of a budget for too long.

To answer your question, I could DEFINITELY decrease my spending even further if I had no job. I would go into survival mode and pretend I was broke and work harder to increase income and find a new job.

Best, Sam

There is no doubt that I could adapt enough to get the job done whether it took being frugal or finding alternative sources of income. Many people are quite resourceful and live off much less.

We are pretty frugal right now and are trying to live on one paycheck. If I lose my job, it wouldn’t be a huge deal at this point. We should be able to handle it for a few years with minimal changes. If we both lose our jobs, then it’s going to be really difficult.

My lifestyle is pretty low key. My luxuries is generally travel and I keep the expenses low as well. Can I cut back some things? Absolutely!

by: The Financial Blogger | July 28th, 2011 (6:29 pm)

great post MD!

I would actually be pretty grumpy but I would cut down on my expenses before going into debt to finance my lifestyle. I’m the kind of guy that would get 3 jobs and work 90 hours a week to get out of my mess. But still, I would still be pretty upset about it!

I could adjust. I am already a minimalist considering I provide an income for a family of 4. (My wife and kids already call me cheap:) )

I also believe there is a big difference between what is considered a luxurie versus something that is frugal. I am quite far away from frugal considering how often I eat out 🙂

[…] The Financial Blogger asks some really good questions about whether you can decrease your lifestlye spending […]

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I always try my hardest to do both. However, whenever I am evaluating ways to increase my income or decrease my costs, I always look at the price paid, which is often more than money. In my experience, spending money doesn’t buy happiness, just the absence of discomfort. So why work harder to earn more to spend more? I just never understood that logic. I work hard to, spend less and earn more, so I can invest more and work less.

Cheers,
Trip

[…] at The Financial Blogger presents Could You Decrease Your Lifestyle Spending?, saying “Could you start cutting […]

It probably was about a year ago that I put in writing everything I’d do to avoid becoming homeless. Going thru the exercise was really empowering. It made me think of all the things I was spending my money on now that I could eliminate or drastically reduce if necessary.

I even thought of different ways to generate income. Some of which I’ve already done without the threat of homelessness looming. Since I currently live pretty lean (with the exception of dining out and a little traveling), it’d probably be uncomfortable for me to reduce my spending significantly. However, I know exactly what I’d need to do so I’m sure scaling back wouldn’t be too difficult.

My husband lost his job almost two years ago. Although he is working part-time and I picked up a part-time job (in addition to a full-time job) we took a $35K cut in our yearly income. We had no choice but to decrease our lifestyle!

It hasn’t been easy but we still manage to pay all the bills, have kids in private school, etc. We did cut back on the lifestyle of buying whatever we wanted – now it’s a need vs. want discussion.

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