October 06, 2022
With so many essential costs, such as groceries, costing a lot more, budgets are being painfully stretched. A recent survey by Morgan Stanley found that more than 6 in 10 employees report they have had to reduce what they are able to contribute to their savings. That includes nearly one-third of survey participants sharing that they have cut back on their 401k savings.
I get it. I promise. This is not an easy time financially. But before you scale back on retirement savings or emergency savings, my wish is that you will stand tall in your truth that you may have ways to reduce spending so you can stay on track with these essential goals.
They are essential not just because they build near-term and long-term financial security. Important as those goals are, I want to help you worry less and feel more in control of your life. That’s financial freedom. And staying on track with savings goals is one of the most powerful ways to boost your sense of financial control.
Here is my strategy for how to maybe find some spending cuts.
Take a fresh spin through the last three months of bank and credit card statements.
Circle or highlight the “wants.” There’s a lot of savings to be had by reducing/eliminating that spending. Yet we get so set in our ways, our financial habits, that we don’t stop to think about what is and isn’t working today. If you can’t find the money to stay on pace with your savings, I think you will find it invigorating to realize that scaling back spending on “wants” will free up money for other goals. And that is going to be a big financial anxiety reducer.
Check your auto-pilot charges.
When was the last time you reviewed all your subscriptions that automatically charge you every month or year? This business model is in fact hoping you aren’t paying attention. Look, if you use a particular subscription a lot, then keep it. But all the ones that you barely use, stop with the “Oh, it’s just $10 a month. Or $15 a month.” That adds up. Get rid of any subscription you don’t use frequently. And then challenge yourself to see if you might be just fine cutting back your streaming options by one or two services.
Get rid of a car.
I am serious. Especially for 2 car (or 3 car) families whose commuting needs have changed. Might you need to coordinate if you are sharing one car? Yep. Might you save a lot of money on insurance and maintenance costs? Bigger yep.
Get paid for saving.
For those of you with a workplace 401k that gives you a company match, I want you to make sure you are contributing at least enough to qualify for the biggest possible employer match. Please, if you have cut your contribution rate to a lower level that has reduced your match, please reconsider. It is such a big win to pocket the maximum match; That’s literally free money you don’t want to pass up.