A Balanced Approach to Cutting Back

February 22, 2023

As a financial planner, I enjoy listening to other financial planners. I love when they discuss strategies to help people get out of debt and better manage their money. Although I agree with many of the money management strategies, it strikes me that some approaches are extreme. Additionally, many common strategies have little room for a more balanced approach.

For those knee-deep in a financial crisis, I agree that drastic financial cutbacks are needed to climb out of an emergency. There may be a better approach for others not in crisis but need ways to save and pay off debt. I always tell people to gauge what strategy will keep them consistent in paying off debts and saving more. The more extreme you cut back, the quicker you will reach your goals. However, you can still reach your goals and enjoy some of the extras in life with a little modification:

Cable and Streaming Services

I do agree that cable is a want, not a need. However, perhaps watching football or the Real Housewives of “insert city here” is one of the joys in your life. In that case, consider reducing your cable plan to a cheaper streaming service covering your most watched channels. Better yet, look at cable alternatives such as Sling TV or Playstation Vue, where you can watch your favorite cable channel shows in real time. Or rotate your “extra” streaming services so you’re constantly binging the hottest show.

Eating out

Again, if you are in a financial crisis and are seriously behind on your bills, you may have to eliminate eating out. However, if this isn’t the case, and you can’t seem to stop eating out, consider simply cutting back. If you spend an average of $20 eating out and cut it 2x weekly, that’s $40 a week, $160 a month that can go towards saving for emergencies or paying down debt. If you have a typical weekday at work that you work longer or a day where your kids have a lot of after-school activities, you could make those eating-out days (give yourself a budget) and still save towards your financial goals.

Entertainment

Consider some modifications if you are single and going out is your main social activity. For example, you can order an appetizer or a small salad if you eat before going out with friends. Your wallet will thank you. Better yet, skipping drinks with your meal or having only one cocktail with your friends can save even more money.

If you enjoy going to movies, check to see if your employer offers movie ticket discounts. Look for deals using websites like Groupon or Living Social, or search for dollar movies in your area. If you go to a big event, consider either not buying food since it is so expensive or getting the kids’ options, which are cheaper but still give you your food fix.

Cutting back doesn’t have to mean extreme deprivation. As you can see, you can still enjoy your life and save money. The key is looking for certain areas to cut back in and modifying the areas that matter most to you so you can save money with a more balanced approach.