Cutting Expenses Without Depriving Yourself

If you have done any reading at all into what the FIRE movement is all about you will know by now that reducing how much you spend is key to building your money pot.  But this idea of cutting expenses while usually a good idea can be taken too far when you go from decisions like,


“Should I get another one of those 10 dollar beers?”  
to
“Should I buy this bag of apples instead of the cheap Raman?”  

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The first one is a good question to ask yourself what real value do you get from another glass of the expensive beer.  The second one is where you need to check yourself and realize that while Raman is cheap an apple is probably better for your health and happiness.
The desire to reach FIRE can be all consuming and it can very quickly become an unhealthy obsession when taken too far (been there done that).  The point that I am trying to make with all this is that you need to look at what you are spending and separate out the frivolous (expensive beer) from the important (eating healthy food and enjoying life).


Don’t make the experience of trying to reach FIRE so stringent that you are miserable and sick the whole time.  You need to be able to enjoy life while you are saving for a better future. So keep a bit of fun money in your budget and make sure that when you spend it is guilt free.




3 Strategies to Avoid Depriving Yourself


Pull Cash as fun money
One strategy I use is the cash fun money strategy.  At the beginning of every month I pull out a set amount of cash from the bank that I use for everything fun/not in the budget.
This includes,

• Eating at fast food places
  
• Gas station pick me ups while I am working
  
• Small hobby related expenses.
  

In my personal example I always pull about 40 dollars a month in cash and when it’s gone it’s gone no more fun money for me that month.


Indulge in one vice smartly
For me my vice is the movie theater.  I love going to the movies I try to see a movie every weekend.  If you have ever gone to the movies you know this can be an expensive proposition.  I keep this vice smart by doing a couple of things.

• I only attend matinee shows (very rare exceptions)
  
• I never get concessions-who wants to pay 8 bucks for a bag of popcorn
  
• I pre purchase gift cards for the theater using a credit card and a website called My Gift Cards Plus (more on this in another post).  This saves me money and I get rewards points on purchases.
  
• Try to go to movies at the local budget theater vs a chain theater.
  

Now this example applies really only to me but I am sure if you know what your one vice is that you can to figure out a way to do it smart.


Use Rewards Point money to be frivolous
If you are reading up on FIRE you are probably familiar with credit card rewards and how they work.  The crazy thing is you can really make these rewards work for you by being smart about how you use the cards.  For example I recently started using a new credit card that gives me 1.5% cash back or I can use it on Amazon.com as purchase points.  I will use the points from that card to make just fun purchases like new vinyl albums or the wife’s Christmas presents. This same card since I am a new member will also automatically give me 150 dollars cash back if I spend 500 dollars in the first 3 months.  That easy for me since I would normally spend that just as part of my normal expenses.
I really like this one because it is money you didn’t technically work for so it never needs to be a part of your budget unless you want it to.  Used responsibly this could be a great tool to get some extra cash just for fun. However if you are not the type of person who pays cards off in full every month then this is not a strategy for you.   
Please don’t make me responsible for you getting into further credit card debt.




The Moral of the Story
The moral is simple strive for FIRE but make sure that you have fun while you are doing it.

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