Monday, May 30, 2011
Tip #290 - Start Small. Do you ever think about people who are poorer than you and feel sorry for them? You might think it's sad that they don't have money to go to the movies or the funds to take a vacations. Do you ever think about all of the things that you can do that they cannot? Perhaps. But what about people who are richer than you? Do you feel sorry for yourself that you cannot join a country club or that you do not have a personal driver? Probably not.
Do you know why? Because most people do not miss the things that they never had. Most people do not feel like they are missing out on life because they do not have a live-in maid. Just like those less fortunate than you do not feel that they are missing out on life because they cannot go to the beach each summer.
How does this relate to saving money? Well, it is harder to cut back on your lifestyle than to never have had that lifestyle at all. Therefore, you should start out small with your purchases. Here's an example: Suppose a family decides that they want to rent a comfortable apartment that will accommodate all four of them? They rent a three-bedroom and enjoy all of the space they have. But after a year of living there they realize that the extra space they have is costing them too much. In an effort to save money, the decide to cut back to a two-bedroom apartment. In doing so, they miss their extra space. They feel like they are living with less and they yearn to have their old space back. But suppose they had started small? They would not have missed the extra space because they never had it in the first place.
When someone is starting out on their own, it is best to start out with a less-costly lifestyle and gradually build it up as you are financially able. Even if you temporarily know you are living on two incomes without kids and can afford finer things, make them a special treat rather than part of your everyday lifestyle. If you gradually increase your standard of living, you will appreciate each new upgrade rather than if you start out big and need to cut back.
In Real Life (IRL) - When my husband and I were both making an income and we had no children, we had the ability to live it up a bit. We could have eaten out quite a bit, taken extravagant vacations, and lived in a fancy apartment. But we knew that in the near-future we'd be cutting back to one income when we had kids. So fortunately, we saved most of our extra money and lived a more meager lifestyle. Although, it wasn't intentional not to live large because we knew cutting back would be harder psychologically, it worked out that not getting used to a fancier lifestyle was a benefit to us. Had we been used to staying at Marriott Hotels, Comfort Inns would be more challenging for us today. Had we been used to buying new cars every few years driving one for 10 years would be difficult. Had we been used to a fancy apartment with granite countertops and stainless steel appliances, a 50-year old home with an outdated kitchen would have been hard to get used to.
There are always exceptions. When we got married and went on our honeymoon, I remember the travel agent convincing me to go for the luxurious hotel with the fancy outdoor fancy pool when I was looking into staying at a more modest hotel. As it was a once-in-a-lifetime event, I am glad we did it. But that was a special occasion. For our regular vacations those first few years we still looked for the best deal on a nice, comfortable hotel without going overboard. While I wouldn't want to look back on my life and say "Gosh, we should have flown to Paris when we had the opportunity," I think starting out small and gradually increasing your standard of living is easier and more doable financially than getting used to luxuries that you will need to later cut back on. Start small.
Instead if you start out slowly and build up your lifestyle, you will not miss what you didn't have.