We advisors dread telling clients that they must decrease their spending or risk running out of money. How can that message be delivered magnanimously? And of course, the only way we wealth coaches can help is for our clients to be willing to let us analyze how they are spending their money currently, so we can work together on how/where to cut back. That requires full transparency on the clients’ part, which can feel like a real violation of privacy. It is those clients who allow us that level of intimacy and trust who make the most progress.
Due to a confluence of personal circumstances between one of our staff and her husband, they decided to cut out about 50% of their living expenses compared to a few years ago. The first 30% was a no-brainer and really didn’t affect their lifestyle all that much. It was the final 20% that took some effort. Of course, gone were the multiple dining-nights out each week and the annual-exclusion checks they wrote to their children. They reduced the number of hours for their personal assistant/housecleaner/errand runner of 15 years by more than half. Little things such as her doing her own nails and cutting her own hair (yeah, really) two to three times between appointments were not that life-altering. The two-hour massages she used to get every Saturday are now 90-minute massages every third Saturday. The daily $5 bones they gave to their dog are now $2 bones. The flagrant trips to Whole Foods are now mostly substituted with trips to Safeway and Trader Joe’s. She no longer has a gym membership, and she hasn’t replaced her car in 14 years. She shopped around for insurance instead of just automatically re-upping with her existing provider, saving hundreds of dollars per year. They cancelled that second landline that they never used, saving $35 per month, and fine-tuned their wireless and cable subscriptions.
The purpose in telling you this is not so you can feel sorry for our team member, but rather to share with you that she feels really good about these changes and about herself as a result of making them. Life is simpler now! For example, she used to spend way too much time writing notes to her personal assistant rather than just handling things herself. While her nails don’t look nearly as nice as they used to, it’s nice to have the freedom to just do them herself on her own time, in her own home, rather than having to coordinate, make an appointment, drive to the manicurist, etc. And now two out of three Saturdays belong completely to her instead of her massage therapist. While she does miss lobster in her daily kale salad, she still enjoys her kale with delicious proteins.
Another unexpected benefit of cutting back is that she and her husband have had the chance to communicate about what’s important and to work together on a common goal. When they started this process, she never dreamed she’d be sharing what is typically an embarrassing set of circumstances in a positive light. When their incomes return to where they were a few years ago, they don’t think there will be major changes in their current lower spending level. Well, maybe, she’ll go back to getting lobster for her kale salads! 🙂