TAKE DRASTIC CUTS

When things look dire and you’re not sure how it’s all going to work out, taking a more drastic approach to cutting spending will help. Your goal is peel away every unnecessary item from your spending and cut costs in other places as well.

For example, cut out or drastically reduce everything that’s not vital.

• Carpool or take public transportation.
• Make food shopping choices based on cost: eat beans and rice instead of beef for protein. Don’t buy any chips, cookies, soda, bottled water, or processed food. Buy big quantities of whatever inexpensive food is on sale and make several different meals with it. Eat through what’s already in your freezer, refrigerator, or pantry first before you go shopping.
• Forego manicures, pedicures, hair coloring, facials, and other beauty treatments.
• Review your home entertainment costs such as movie channels and sports channels, eliminate the extras. Cancel video rental subscriptions.
• Cancel radio satelite or GPS subscriptions.
• Go much longer between haircuts, and choose an inexpensive hair-cutting salon when you do go.
• Forego buying video games.
• Make it through a day, or two, three, or even a week, without spending any money at all. At first, this may be quite challenging, but it will get easier.

This is not sustainable — you probably can’t live in this way for lengthy periods of time — and it’s not necessarily healthy, but it will give you significant short-term results that can help you weather a crisis.