This is the third post in a series on downsizing, written about my own personal experience with this painful yet liberating process. The first post can be found here and the second here.
In my previous post, I spoke about how critical it was to put all of your expenses and income down on paper. Have you done that yet? No? Not to worry, I’ll wait…
OK now, have you got everything there? Birthday gifts, Christmas gifts, Mother’s and Father’s Day, clothing, insurance (medical, home, cars), car payments and registration, gas, electricity, pedicures (shhhhhh), hair salon appointments, lunches out (does McDonald’s count? yes, yes it does), debt repayment (if you are repaying it), everything!
Now, did you come up with a total expense number per month? Do that.
OK now scrape yourself up off the floor, I’ll wait.
And it will be OK. Really. We did it, fell on the floor, mouths gaping, sweat beads forming, hearts beating wildly. (This is the moment when yogic breathing is REALLY helpful. Or yoga. Or just breathing really. Just breathe.)
Some things we discovered in this exercise:
- We had entirely too many nieces and nephews who celebrated birthdays. It was time to cause a major family rift.
- I would need another job just to pay for my favourite pastime of changing my hair colour 70 times a year. I should simply shave my head.
- The children were growing entirely too quickly. We needed to stop feeding them immediately.
Well, OK, so short of those ideas, we ended up cutting out things like lawn care, house cleaning, the frequency of visits to the dentist (we still went, of course — just not as often), vacations, chiropractor visits, eating out, clothes shopping to some extent, and a golf course membership. We consolidated our insurance policies, switched out our cars for less expensive and more gas efficient models, stayed home more often, and focused our gift-giving and charitable donations.
We did not change the boys’ schools nor their (or our) access to sports and exercise. Nor did we change my proclivity for changing my hair colour with every moon cycle. We could have addressed those too, but they were priorities to us. (OK, the last one was only important to me.) These priorities will vary by family, of course.
Even after all these changes, though, it was crystal clear that cutting our cable bill would not cut it. I mean, NOT AT ALL. Oh sure, cutting our cable and other expenses would affect the debt we would accumulate going forward, but it wouldn’t deal with the mess that we had behind us — the debt that we had racked up and that would continue to grow.
(Of course, if that IS all it will take in your situation — making adjustments to your monthly expenses — to get your head above water and to bring peace to your finances…hooray! Woohoo! That is great! Carry on, Canada! You can take everything else here with a huge grain of salt, or not at all. Or keep reading if you feel like a lifestyle change would still be good for you and your family.)
Now, I need to tell you, if it’s not already obvious, that I am not a finance guru or a ninja budgeter. Nor am I a math whiz. (OK, I am pretty darn good at math.) But I do know, and you do too, that cutting $100 from your cable bill is going to do very little to a line of credit that is giving you heart palpitations at night. It WILL help you manage things going forward, though, so please by all means reduce that monthly expense number as much as you can. That in and of itself will help you feel like you are taking control versus letting life happen to you.
There are loads of resources online to give you great advice on how to cut, track, and manage your budget. People love Dave Ramsey, for example. Look him up. Look up others too. Get informed on this; it can’t hurt and it will help.
In our situation, we saw very clearly that we needed to do something more drastic than cutting our cable and eating at home more often. With no income on one side and unsteady income on the other, how in the world would we find a chunk of money to pay down our debt? It was time to think of the (seeming) unthinkable:
I needed to leave my husband and find a rich doctor. (His idea, not mine.)
Kidding again! Of course!
No, it was time to think about simplifying our lives, changing our lifestyle, capitalizing on the equity in our house, and finding a smaller, less expensive home for our family.
Now I know that for some of you, finding a sugar daddy/momma actually sounds LESS drastic than selling your house. You are so attached to your home. It’s where you spent your first night as a couple, brought your baby home, raised your kids, celebrated countless happy family occasions, and cried and laughed together. I get that. I see it every day in my work as a real estate broker.
So please stay tuned for the next post in this series, which will look at how to frame a huge change in a way that doesn’t have your family running for the hills. Or, if they do run, with a very good chance that they’ll come back…especially if there’s sammiches.