This has been a tough financial year for a lot of people. Rising gas and food prices. Rising interest rates and mortgage payments. A poorly performing stock market. There’s been a lot of bad news.
But the toughest part for most people is having to adjust their spending habits accordingly. Once you’ve gotten used to a certain standard of living, it’s really, really, really hard to downgrade—to go back to the no name brand, to stop ordering out food every week, to get a less expensive car.
Cutting back sucks. It feels like failing. And that’s why most people don’t do it. They just keep on living exactly like they did before, bury their head in the sand, take on debt to make ends meet, and hope that things will be better next year.
And with any luck, that will be true. Hopefully, inflation will settle down, the rate hikes will stop or even reverse, and the market will recover and go on to new highs. That’s certainly what I’m hoping for.
But I know good financial plans aren’t built on hopes and prayers. They’re built on taking the necessary steps to be in a good position no matter what happens.
When times are tough, that means cutting back.
Before the pandemic hit and gas prices took off, I used to love going for a drive and listening to music. It was one of my favourite things.
But then my wife and I sold one of our cars and gas prices soared, and so I stopped going for drives and started going for walks with my headphones in instead.
And no, frankly, it’s not the same. But it’s a helluva lot cheaper and I’d rather save the gas money than cut back in other areas of life or get off track with our long-term goals.
So I get it. It is hard and it does suck.
But the alternative is worse. Sinking into debt. Falling farther behind. Relying on hope and hope alone. It’s no way to live.
When you’re going through tough times, you need to make adjustments.