Cutting Expenses has Limits: Here is What Doesn’t

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There is a never-ending supply of articles that will tell you how to cut your expenses in order to save more for your long-term goals, such as buying a car, buying a house, or retiring.  But if you think about it, you can only cut so much, right?  Sure, you can reduce your use of electricity through careful use of your air conditioning and being certain you are turning lights off in unoccupied rooms.  But you want to be able to have lights, cook your food, and heat your water, so that means your electric bill can only go so low.

What about groceries?  Yep, you can shop with a list, avoid convenience food, and focus on buying nourishing whole foods, but you can only reduce the cost of groceries so much.  You and your family have to eat!

We can make examples like this all day long.  I am guilty of writing often about ways to save money.  It can be a fun challenge to find new and improved ways to save a few more pennies.

But there is another way to reach our desired financial goals.  There are two types of cash flows when it comes to our budgets: there are outflows (expenses), but also inflows.   The obvious inflow is from our jobs.  This might be an hourly wage or a salary, or it might be income from self-employment.

Inflows might also come in the form of a second job, a side hustle, or maybe from selling off some of our belongings.  An interesting thought experiment (or perhaps this actual situation has occurred in your life) is to pretend you had a sudden need for $5000.  Whether it stems from a medical bill, loss of a job, or a desperate need for a long vacation, pretend you have only thirty days to come up with this $5000.  Where could you get it?  For this experiment, you are not allowed to withdraw it from your existing savings, investments, or retirement accounts: you must create this $5000.

If you are a salary or wage worker, could you ask for an additional assignment or extra hours to make the extra money?  If you are a commission worker or self-employed person, could you work extra hours to win a few more customers this month?  Could you clean out your closets or garage and sell some items for cash?  Or perhaps you could pick up a side hustle briefly.

Brainstorm hard on this question: how COULD I come up with $5000 extra this month?  Make a list and then think some more.  Don’t be afraid to come up with some wild and crazy options but keep it legal!

When money is tight or you simply want to reach a little farther to your financial goals, be sure to consider both sides of your budget.  Prune what you can from your monthly expenses, but also be sure to examine ways you might be able to create more income in your life.


How have you made some extra cash when needed?  Share below!  Or if you want to start a discussion with some like-minded friends, join the free SimpleMoney Community on Facebook to share your thoughts!

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