Every now and then, we all get a little complacent with our finances. Maybe lifestyle inflation kicks in, maybe you’ve lost sight of your goals, or maybe you just got lazy about budgeting. If you’re ready to get back into financial shape, try this exercise.
Money picture from Shutterstock
If you’re on track with your financial goals and you’re satisfied with your spending plan, that’s great. However, most of us get to a point where we just stop trying to work toward our financial goals, because we get comfortable, the process gets old, or we simply don’t realise there’s more we can do.
Guest writing for Get Rich Slowly, money writer Adam Baker has a useful solution for jumpstarting your finances: ask yourself what you would do if you earned half your income. He writes:
What would you do if, starting tomorrow, your income was immediately cut in half?
To receive benefit from the question, it’s important to leave details on the sideline. It doesn’t matter how or why it happened; instead, focus on what steps you’d take if you had to live on half your income starting tomorrow. Most people would have to make radical changes.
When you ask yourself that question, think about it in terms of both expenses and income. First, what would you do to save money?
…your first steps may include selling an extra car, cancelling an expensive [Pay TV] package, and slashing your grocery budget in half. In this situation, you’ve likely brainstormed areas of your budget where you aren’t spending as optimally as you may like. You may choose to go ahead and try some of those options out, or at least take steps to narrow the gap between your life at 100% income and your life at 50% income levels.
On the other side of the equation, ask yourself what you’d do to recoup some of your lost income.
..Realistic options could include enrolling in a course (applying for aid if needed), launching a side business, and/or picking up new clients or leads. Nearly every time I brainstorm options for doubling my business income, I unearth something I hadn’t thought of before. Acting on these new ideas has helped me tremendously in generating new income (even if it doesn’t immediately double it)!
Your list could include anything from asking for a raise to getting a roommate. After you’ve created this list, the purpose is to see what options you have to save more or earn more. Are you willing to take action on anything you’ve listed in order to meet your financial goals? If so, come up with a plan and move forward.
Of course, you may already be doing everything you can, but your situation just is what it is and there’s nothing more you can add to either side of your list. Often, though, we assume there’s nothing else we can do when there are actually more options than we think. For those who think there may be more they can to do jumpstart their finances, the exercise is worth a try. Check out Baker’s full post for more detail.
A Simple Question to Jump-Start Your Finances [Get Rich Slowly]