Don’t cut your expenses.
Seriously, don’t do it.
We tend to buy things in excess.
There’s an episode of the Bernie Mac show where he expresses his newfound affluence, by purchasing insane quantities of household items like toilet paper. Not a little bit much, enough to lose his children in the house amongst them.
While a hilarious exaggeration, people do tend to spend more once they increase their income.
We’re told this is a bad thing. I’m here to tell you forget them and spend away.
Keep on indulging in Costco binges.
Hear me out. Spending $40'000 on a new luxury car just to impress a bunch of people you hate is dumb. Spending $60'000 on a new BMW M4 because you’re an auto enthusiast and will be happy to race to work everyday isn’t a bad purchase.
The difference here? It’s your happiness.
Instead of rushing to cut your expenses, truly take time to figure out what motivates these purchases.
Heck, not even all impulse buys are bad. Granted you should shop around, impulse buying life and medical insurance isn’t a horrible choice. Spending thousands of dollars at a club because other people around you are is indeed a horrible choice.
It’s okay to spend $100–200 on a dinner once in a blue moon (not every week). Maybe a dinner with loved ones you haven’t seen in a while? Splurging buying bottles at the club to impress people who don’t even know you (and won’t sleep with you, sorry), isn’t worth it. Buy yourself self-esteem instead.
Seriously, spend some money to make yourself more truly happy. I promise you’ll end up making more money afterwards. If it’s meditation, therapy, travelling, do it!
Once you figured out that your Balenciaga™ addiction is fueled by trying to get back at Jessica from high school who made fun of your clothes, what about your other expenses? The ones that mean something to you?
If you’re a music enthusiast and have a subscription to streaming services, do not cut these, unless you enjoy hating life. Instead, find a promotion for something else you like or better yet already are paying for, that gives a free subscription to a music streaming service.
Concerts and cellular providers have partnerships with the major platforms. Use these as much as possible. Sometimes even music classes and amusement parks will offer these free promotions (hint: check Groupon).
Why miss out on the latest Beyoncé or Rihanna album if you can listen to them for free (legally), without paying $9 per month? If you do have to pay for a service because you’ve failed (shame) at finding a promotion, figure out how to share a subscription. Split it with one other person and just pay for the full year to avoid drama when one of you misses a payment.
Here’s another tactic. Some companies offer huge discounts, upwards of 50%, for just paying for a year of their service. If you can foot the bill pay upfront for the year and save.
People spend money to maintain themselves and their happiness. Why would you reduce this? If you can change what genuinely makes you happy then great. Don’t become a penny pincher that doesn’t buy coffee anymore. Especially if that coffee is what keeps you focused at work.
Spending more to stay focused is why the wealthy buy business and first class seats. They realized that they can afford to spend an extra $1000 on an upgraded seat to be well rested when they land. Being well rested usually equates to better performance. If you can make $30'000 per speaking engagement, it’s worth the extra $1000 to nail it and attract more opportunities.
Cardi B and Tekashi 69 did this. Cardi B invested in her body through surgery and injections to make herself more attractive to the masses. Tekashi got insane tattoos all over his body to position himself as a new age rapper. This paid off well for both of them (well… maybe not Tekashi).
If you want to make more money sometimes you have to spend more to make more.
Another trick. See if you can get sponsored. It’s not uncommon to have your travels paid for by performing volunteer work. Government subsidies exist for many training and certification programs. You’ll gain more knowledge and a fancy piece of paper you can use to help you get higher pay. Some governments (Canada) will even pay you to partake in free training!
In Japan I was able to get discounts on my rent payments by performing duties such as helping to clean the facilities.
The interesting thing is that in most developed countries, you can get discounts on almost anything. A perfect example is your cable, internet and cellular services.
My trick that has worked is to over-indulge temporarily. When you’ve paid the fat bill for 2–3 months, you’ll have a lot of leverage to go to your provider and ask for a discount. Combine this with a supposed offer from a competitor and you’ll find that your “best available package” becomes 30% cheaper (or more).
Spend the time and put pressure on your provider. How much depends on many things but you’ll save money regardless. If you need help doing so, read this awesome blog post by Tim Ferriss. This helped me save immediately.
If you can’t find any of these discounts, there is another slightly more painful method to cutting your expenses. Look for overlap and make the choice.
I know that Amazon’s music steaming service isn’t as good as Spotify but you’ve already paid for it with your Amazon Prime membership. The same goes for Netflix and Prime Video.
Cutting back as opposed to cutting out expenses entirely is much less painful. One tactic I found was when moving into a new home, I bought the best internet I could get. Each month I would decrease the speed by a tier and see if it continues to meet my needs.
This tradeoff system is especially great for when cashflow gets pinched and you need to cut back.
Instead of switching to one ply tissue paper, see if you can buy two ply in bulk like Bernie Mac, or just get it cheaper somewhere else. Some products vary in price by up to triple the amount depending buy them. I found that my toothpaste came in larger quantities for less money on Amazon. Other household items were cheaper at pharmacies.
Cutting out expenses entirely is the dramatic, last resort. It’s lazy advice frankly.
A much better approach is to just keep purchasing what makes you happy for less money.
So don’t cut, decrease.
