The second thing is…is downsizing the only way? No, it’s not. In fact, I feel like cutting back on spending has actually become more difficult. The cost of living has risen. If you eat out a lot, your food costs will rise by about 30%. So for people who eat out a lot, this is where you now need to start deciding whether you want to do the harder part of preparing your own meals, or perhaps continue the experience of eating out, but cut back on other areas in life.
However, I always feel that there is always a limit (to downsizing) because the maximum you can go is the amount you spend. Another way to do this is to increase your earned income.
Andrea:
Well, talk to me about it.
dawn:
So when you increase your earned income, whether through active or passive sources, you can actually get a lot more bang for your buck.
So when you increase that and keep your spending moderate, you can actually get a bigger difference than just trying to cut back, because there will also be that point when you’re saving until you’re miserable and (thinking) what’s the point in life?
Andrea:
exactly. Then it’s like, “Oh my God, I’m working so hard to save and nothing comes of it. Is this really the only answer?”
dawn: