Because we’re still fresh into 2011, the financial advice about how to make this your best year yet is still pouring in. As is always the case, much of the "wisdom" is predicated on the idea that the way to shore up financial stability is by cutting expenses. Just the other day, I read a fresh article in a well-known online financial publication that essentially stated that the key to success lies in doing things like bringing your lunch to work instead of eating out, cutting your own lawn instead of using a service, buying generic products instead of name brands, and making other similar kinds of efforts.
Unfortunately, for those who have a real and significant cash flow problem, either they have already done those things and are still struggling, or making those sorts of changes will not be impactful at the level they require in order to get on the right track. One of the problems with focusing so much on cutting expenses as a means to financial viability is that there is only so much you can realistically cut. The family of four earning $40,000 per year is already, it’s safe to assume, living without much by way of luxuries, so how much more can a family like that really do without and still survive?
Another problem with cutting back is that it’s generally unpleasant. Even if you steeled yourself to making do with next to nothing, the result is a chronically distasteful lifestyle that makes the sound of the morning alarm little more than the starting gun to a depressing day. I’m not talking about for the person who may be eating out five nights a week and is now facing the “painful” prospect of eating out only two; I’m talking about for the person who has already made eating out entirely a thing of the past, never takes any sort of vacation, no longer even goes to the movies, and for whom cutting back further might mean eliminating basic cable TV, dumping some forms of insurance coverage, or actually modifying diets so that less food needs to be purchased at the grocery store.
Frustratingly, family financial planning and budgeting seem to focus way too much on the idea of living within your current means, and far too little on increasing family inflow. Of course a family should cut where they can if they are struggling, and of course people should live not only within, but well within their means, but how about paying some real attention to increasing those means? The good news to that end is that in this day and age where people with a phone and a computer can fashion professional offices from a spare bedroom, there is more and more legitimate opportunity to actually work another job right from home, thereby lessening the strain on family relations that working multiple jobs invariably produces. One great opportunity there is in the area of Internet marketing, and some tools to be successful at that can be found at Christian Internet Income (www.christianinternetincome.com).
In the end, the efforts at increasing your income by working more at your present job or taking a second (or even third) job will surely compromise your available recreational time, but when you do have some, you’ll actually have the ability to enjoy it. By attacking cash flow problems solely by cutting expenses will mean that while you might have more time, there’s nothing you can afford to do with it except sit in one place with the lights out…and what kind of life is that?
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Bob Yetman, Editor-at-Large at Christian Money.com (www.christianmoney.com), is an author of a variety of materials on personal finance and investing, as well as on topics of fitness and self defense, to include the book Investor's Passport to Hedge Fund Profits (John Wiley & Sons, Inc; www.investorspassport.com) and the unarmed combat training DVD Thunderstrikes – How to Develop One Shot, One Kill Striking Power (Paladin Press; www.mikereevesonline.com).