Ask Away Blog: Why You Need to Sacrifice For Your Financial Goals

Why You Need to Sacrifice For Your Financial Goals

Wednesday, February 26, 2020




When it comes to getting yourself in a better financial situation, it’s common practice to set specific goals. Maybe you want to build up a nice savings fund so you never have to stress out in an emergency. Perhaps you want to pay off your credit card debt and student loans. Maybe you simply want to get on a budget and stop living erratically desperately waiting on your next paycheck. Whatever your goals are, I am telling you that it’s nearly impossible to achieve them without making some sort of sacrifice.

Sacrifice is a scary word and a scary concept for many. When most people hear that they need to sacrifice something they imagine themselves in tattered clothing, freezing cold, and depressed because they can’t do anything. That’s not the case and it’s not that dramatic. But here’s the thing, you DO need to sacrifice and today I’m going to talk about how sacrificing in certain ways will help you achieve certain goals.

Sacrificing for a Budget

So you’re ready to get on a budget and you have spreadsheets ready to go but you start to panic when you think that you’ll only be putting your money towards your bills and necessities but that’s soooo not the point of a budget. The common fear and misconception is that a budget restricts your spending but the truth is a budget CONTROLS your spending by giving every dollar that comes in a specific job whether it’s for bills, groceries, or fun. That’s right, there is a middle ground here. Of course if you follow my guide to being on a budget, you know that I tell you to first ensure you have all bills covered. Then comes the necessities like groceries and medications. But then after you analyze your spending from the last 3-6 months you can actually see how much of your money goes to different categories like car maintenance, vet bills, fun, and gifts for others. With the money you have left after your bills, you just need to go through and decide if what you spent in each category over the last few months is required or not. So for car maintenance maybe you know that you spend money on oil changes every 3 months and you want to plan for that so you divide that cost up to get what you should put aside monthly. Then you can look at how much you spent on clothing. If the amount seems high but you know that you’ll obviously need new clothes from time to time, you can determine a lesser amount that you can set aside each month so you have a reasonable accumulation of money when you DO need to upgrade parts of your wardrobe.

You may need to start using cash only and that’s also something that scares people. But it shouldn’t. People always say they are afraid they won’t stick to their budget, but if you’re using cash for different categories, you HAVE to stay within the budget. If you go to buy something and on the way to check out you see something else you like, you’ll start thinking twice when you see the price. You’ll add up the total and see if that’s what you have in your envelope. If it’s not, you’ll make a decision and a sacrifice. Which item do you want more? This is honestly something we teach kids so it shouldn’t be so scary as an adult. When kids say they want a certain toy with their toy money and you explain they don’t have enough, you generally tell them they can wait and keep saving or they need to pick a less expensive toy. It’s the same for adults.

So what sacrifices might you need to commit to in order to achieve your goal of living successfully on a realistic budget? You may need to start using cash only. You may need to try to lessen regular expenses like groceries (buy generic or meal plan) or cut back on your bills (negotiate with your cable provider or cut your package down). You may even need to simply LIVE on a budget. No more spending mindlessly on whatever you want. Decide what category something you want is in and then see if you have enough for it.

Sacrificing to Become Debt Free

When you’re in the process of getting out of debt, the only way to make great progress is by great sacrifice. But the reward is an amazing feeling. There is nothing quite like the feeling of paying off your mountain of debt and feeling like you can breathe again without something hanging over your head. This is one of the scariest parts of financial goals that people are afraid of because the sacrifice can be pretty big, but if you really want to achieve your goal, you HAVE to do it in some way shape or form.

I explain in my book, Fixing Your Finances, that in order to see what you can pay extra towards your debts each month, you need to make sure you budget has extra leftover after all your bills, regular savings and expenses, and minimum debt payments. If you have a negative number left over that means you have no extra money for debt and often times you need to start selling items online to make some extra money, or you need to pick up a side hustle. But what I try to reassure everyone about is that it’s not forever. A part time job or working overtime at a full time job is only until you get more on your feet.

Another sacrifice that people fear is what to do with extra money you get as a gift or an inheritance. Yes, it would be so nice to go on a vacation or buy something fancy but you can still do that stuff one day AFTER your debt is paid off. The hardest part is getting started, but what I remind people is that if you start making sacrifices even just for a week or a month, you’ll start to see results and that will start to reward you for your sacrifices. It makes it easier to keep on that track.

Sacrificing to Save

You would think having to cut spending or get a second job is the worst sacrifice ever, but let me tell you that most people actually say that saving money is the most difficult sacrifice for them. Why is this? Perhaps it’s because when you save money, it’s not as rewarding as feeling a chunk of debt fall off your shoulders as you pay it. When you save, money just sits and accumulates. That’s exciting and all but it seems to go slower than most of us would like. That’s why most people when gifted money choose to spend it instead of save it. Even I’ll admit that it’s a challenging concept.

This is why I always tell people to make their savings harder to access and to set up automatic transfers from their bank account on payday so they don’t even get a chance to debate if they want to set money aside for savings. The other thing I assure them of is that once you see your savings account start building up, it feels even better than being debt free. It provides a sense of accomplishment and a safety net that even if the worst thing happens financially, you have something to fall back on. If you lose your job, it buys you time to find a new one. If you’re in a toxic relationship, it can help buy you an escape when you move out finally.

The Middle Ground for All Sacrifice

One of my pet peeves is when someone makes a comment about another person that bought something for themselves and they say “I thought she said she was broke and on a tight budget, how is she buying ice cream for herself?”. First of all, it’s not necessarily ANY of your business. Second, you will never succeed at anything in life if you don’t allow for fun along the way. That’s why I encourage everyone to have a fun envelope in their cash spending system or a fun category in their budget. Even if it’s just funded by extra money or $20 each paycheck, it’s important you give yourself some money to enjoy life and reward yourself. You would certainly not stick to a budget, a debt paydown plan, or a savings goal if you had to just work and come home and be a hermit and not speak to anyone, right?

Also, people are SO hard on themselves when they falter while working towards their goals. Mistakes happen, and temptation sometimes gets the best of us. But the second something like that happens you need to stop, dust yourself off, and commit to doing better. If you have to tape into your Emergency Fund, it’s okay. Just start building it back up again and keep going.

I promise you that I have succeeded with my financial goals simply because I sacrificed, and that if you are willing to make some sort of sacrifice along the way, you’ll achieve your goals as well. Don’t give up! Find people to support you in your journey and read advice from other people that have walked your path!


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