Alright, so admit it…you might have clicked on this link because you were overcome with playground nostalgia. That carefree feeling of the wind in your hair as you & your playground bud are bopping up and down on that incredible structure we like to call the teeter-totter (such a funny word whether you read it silently, or out loud). I’m feeling pretty audacious because I decided to write about this (incredible) playground feature to depict how decreased costs and accelerated goals can be feasible.
We each have several expenses that can be evaluated to determine areas we can save on. I’m not talking about breaking down your budget to bare bones, but simply determining additional ways to save can be pretty awesome. The reason it’s awesome? Decreasing costs can accelerate your financial goals. Generating more savings in one area of life, can allow for allocation of money towards increasing momentum for a money goal you have set for the future. The simplicity of this concept lies in the glorious teeter totter.
Here is an image for the teeter totter analogy:
(Shout out to my awesome fiance for taking 3 minutes of his time to generate the friendliest looking teeter-totter graphic ever)!
Think of it as when you save money on certain expenses, instead of spending that money you can take it and throw it towards a financial goal (i.e. paying down student loans, saving for a down payment, working towards a future travel adventure). Finding expenses to decrease costs on can actually get you to where you want to be faster. Or more-so, referring back to the teeter totter: flying high – because you know you always wanted to get that giddy, adrenaline rush of being up in the air instead of planted in the bark dust (yuck, who likes bark dust slivers getting stuck in their socks & light up LA gear shoes?! Which by the way, are WAY more snazzy now than when I rocked them as a kid).
Now on the contrary, the opposite can happen. If you so decide to increase costs in certain expenses, your savings goals may experience a decrease, or slow down. Thereby which putting those goals back to experience biting the (bark)dust. This is to highlight that really digging into your expenses and their costs can propel you, or ultimately keep you in place. Which part of the teeter totter would you like to be on?
Now, I know all of us aren’t visual learners. Some of us would much rather see the hard numbers. So let’s ditch the friendly teeter totter up above for a second, and break down how decreasing costs in one area of life can accelerate your financial goals.
Let’s take this one big, chunk-o-money that typically accounts for most of our monthly expenses: living costs.
Hypothetically, let’s say that Katniss & Peeta are living in an apartment in a central part of the city. They enjoy living in a bustling part of town, but Katniss would like to get back to her roots of being able to hunt in the wild in a more remote area (her bow is getting pretty rusty sitting in the storage closet of their small apartment). Moving to an area outside of city limits will decrease their rent expense, as well as move them both closer to their work offices. Katniss & Peeta also realized that moving to a new part of town will decrease their costs of utilities that this different apartment complex offers which creates even more areas of decreased costs.
Their current major savings goal is for a downpayment on a house for the future which they currently have a total of $8,000 saved for.
Check out how their decreased costs can accelerate their financial goal, numbers style:
Current saved downpayment for future home: $8,000
Difference (previous – new) = $875
Difference (previous – new) = $225
MONTHLY SAVINGS TOTAL-
$875 + $225 (difference of rent costs + difference of utility costs) = $1,100
In one month………..($8,000 + $1,100) = $9,100
In two months………($9,100 + $1,100) = $10,200
In three months……($10,200 + $1,100) = $11,300
In four months……..($11,300 + $1,100) = $12,400
In five months……..($12,400 + $1,100) = $13,500
How about in a few years versus months? I am now taking the monthly savings total of $1,100 and multiplying by 12 months of the year to equate to $13,200 worth of savings just for the first year!
In one year…….($8,000 + $13,200) = $21,200
In two years…..($21,200 + $13,200) = $34,400
In three years…($34,400 + $13,200) = $47,600
Now those…are some pretty staggering numbers! Just think about how much money you can put towards a financial goal just by decreasing the costs of 1 or more expenses you’ve got. I have to admit though, the teeter totter of decreased costs and accelerated savings is not for the faint of heart. But I have faith in you that your savings goals can absolutely soar! When decreasing costs, you have to make the effort to take that savings and put it towards your future goals. It may be challenging at first to not view that saved money as extra discretionary spending money. The way to think of it is, if you were paying that much for a major expense prior and living just fine, then taking that money you would have been paying prior can be put towards a financial goal without any issues. It takes the effort to move that saved money towards a goal, but just look at how much your savings can grow.