Money Management - Heart Matters

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5. Downshifters
 

Perhaps, you can use downshifters as models.  Downshifters are people who have voluntarily and deliberately reduced their income and their expenses.

What downshifters do to reduce expenses: 

  1. Toss out credit cards
  2. Track expenses, including the small stuff and record it on budget sheets
  3. Redefine needs as wants and pass on the impulse to get what’s on the mental wish lists like:
    1. Restaurants
    2. Expensive travel
    3. Costly entertainment
    4. Money-dependent recreation
  4. Use direct deposits into savings account, that is, pay yourself first
  5. Avoid living in a space that is larger than what is needed because it’s what you want
  6. Look for ways to satisfy all of the levels of needs on Maslow’s Hierarchy without thinking at the lowest cost possible


Can you see why you might want to consider using downshifters as your model? A major rational belief about personal finance is that there are only two ways to get out of financial trouble—increase income and reduce expenses. If you can’t or don’t want to take steps to increase your income, your only option is to reduce expenses. To reduce expenses, you must change your beliefs about what you think you need (really a want) to what you really need. It’s time for a readjustment of your gut checking mechanism.

The good news for you is that by downshifting expenses you may be able to reduce your expenses by around 20 percent without seriously impacting your standard of living or quality of life.  See Downshifting or Downshifting Week  for more information and ideas about downshifting.  

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