This blog contains some simple tips and advice from two regular guys. We're not accountants, financial advisors, or brokers, so follow, ignore, or discuss our ideas as you see fit.

Friday, September 30, 2011

Pretending You're Broke

Posted By Paul

Like many families, my family is contantly savings towards various goals, and one thing we've decided to try recently is the "Pretend You're Broke" strategy.

We're not doing the super crazy version that I've heard of where you go to churches and other places in order to get food donated for the needy (which is not only extreme, but it seems the worst kind of immorality unless you actually are in dire straits), or where you steal office supplies from work or stop tipping servers (also not cool). Instead we're just going to try to take a month or two and pretend that we're broke as a way to manage our spending and really get a leg up on our savings goals.

For example, now whenever I consider buying a new book/dvd/etc., I ask myself: "Would I buy this if I lost my job and was trying to get by on unemployment?" Most of the time the answer is no, and so I just pass on the purchase or try to find a cheaper alternative.

A few things that have come out of this experiment are:

-My family is eating out less. We still dine out with friends occasionally, but we rarely do the "let's go the restaurant because it's quicker or easier" thing. It helps that we have a small child since in many ways eating at home actually is the quickest and easiest option.

-It's kind of fun to try to come up with cheaper alternatives when it's voluntary. Choices that would be depressing if they were a necessity become empowering when they are done voluntarily.

-We find that with a little one there are often cheap alternatives that the child actually prefers. Our little one is now at the age where he can actually say what he would like to do. I am often amazed at how instead of the pricier things to do (the zoo, child activity center, etc.) he will often pick things that are incredibly cheap or free (like he will want to go to the park, or once he wanted to go to CostCo and watch the tire center put the new tires on cars).

-Some of the things we've tried might become permanent parts of our life. We've discovered that cutting back on restaurants is a sacrifice we are happy to make when in return we get to make improvements to our house or put money towards a trip.

If you find yourself wanting to try to save a little extra money for something, try taking a month and pretending you're broke. We've already learned from the experiment.

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