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Cutting Expenses

For many, the American dream has turned into the American nightmare. The goal of owning a home with a picket fence has turned into a competition to own the largest home on the block with the nicest car and the coolest toys. The average home size has doubled since the 1950's even as family sizes have shrunk. The cost of living that kind of life requires spending most of our waking hours servicing the debt that goes along with it. Over time, those who live that life become numb to the price that must be paid to maintain it. Boredom, a sense of dissatisfaction, and a nagging sense that there must be more to life than this begin to set in. My wife and I could have accumulated more things, but was it worth the price we had to pay to get them? We began to ask ourselves how much we really needed to be happy and whether the pleasure that we derived from things justified the cost. When we really stopped to think about it, the simple things are what gave us the most enjoyment, and they required very little work time to pay for them. Those things included relaxing with a cup of coffee on Saturday morning, taking walks and jogging in the park, and checking out a book at the library to read on a cold winter afternoon. We set up our finances on mint.com and began tracking every dollar that we spent. Once we had a clear picture of where our money was going, we took every category and looked for areas where we could cut back. Each expense was put under the microscope and the following questions were asked: What is the real cost of this? Is it worth the time and effort that we have to put in to have it? (i.e. What is its cost in work hours rather than dollars?) Could it be given up if it helped to set us free from our jobs? We began the process of carefully dissecting our spending category by category. In the next post, I'll begin to break down the process by using our actual budget.

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