3 Levers To Make Anything Affordable
As a financial coach, one of the most common problems my clients have is:
I want to buy something, but I can’t afford it… what do I do?
People think that because I'm a "budget guy," I'm just going to say, "Whelp, too bad... you can't buy it!"
But that's not my message at all. Mapped Out Money is all about helping you use your money to do more of what matters to you.
So I've identified 3 levers to help my clients afford anything they want.
Well, maybe not a private island… but most reasonable purchases. 🙃
So let's see how we can use these 3 levers to help you do more with your money.
Lever #1: The Item Itself
The first lever you can adjust is the quality of the item itself. This involves adjusting the specifics of the particular thing you want.
Maybe you opt for the 2WD instead of 4WD to make the car you want more affordable. Or maybe you buy a Target brand workout top instead of the Lululemon one you've been eyeing. Or maybe you shop for a used iPad on Ebay instead of buying the brand new, fully loaded option from Apple.
The point is you're questioning the specifics of the purchase itself. This is the most important lever of the three. We start with this lever because it has the biggest impact on the overall affordability of any purchase.
The bigger the purchase, the more time you should spend with this lever. Ask yourself:
What aspects of this purchase matter most to me?
How much do I value this thing and what it provides for me?
Could I get 80% of what I'm wanting with a paired-down version of this thing that costs 20% of the full-blown, extravagant version?
Make sure you aren't paying more for something simply because that's what most people do... make sure it's actually valuable to you.
Once you're clear on the specifics that you value and what you're willing to pay for them, it's time to adjust the second lever.
Lever #2: The Timeline
The second lever is all about when you want to make this purchase. Once you're clear on what it is you want, you can then adjust the timeline to make something more affordable. On a long enough time horizon, ANYTHING truly is affordable. The question is, how long are you willing to wait?
Whether it's a new car, dream trip, kitchen renovation, or even something as small as a new hat (this was me a few months ago)... you can always adjust the timeline to make things more affordable.
This past summer, I really wanted this Nick Bare running hat from BPN. But I only had $20 left in my fun spending for the month. While I could've just purchased a cheaper running hat at Walmart (adjusting the first lever) - I didn't want to. I wanted the BPN hat. So I waited until I got more spending money the next month.
Once you're clear on what you want (be it a running hat or a new car), then ask - How long am I willing to wait to make this purchase a reality? Now we need to dive into...
Lever #3: The Trade-Offs
The third lever is where you decide what you're willing to sacrifice to get your desired purchase on your desired timeline.
This is what most people think of as budgeting.
When I bought my running hat, it meant I was actively saying "no" to everything else I could've spent that money on. I said "no" to eating out more, new running shoes, and about a million other impulse purchase "opportunities."
If you want to make something affordable, you have to ask yourself what you're willing to sacrifice so you'll have the money to buy the thing you want the most.
This isn't just about not spending. It could also be that you decide to make trade-offs with your time to increase your income. Perhaps you work overtime. Or maybe you study to get a new degree or certification that will increase your compensation level. Or maybe you decide to acquire new skills for a higher paying career altogether.
Given a long enough timeline and enough sacrifices, anything is within your reach.
The question you have to answer is - Is it worth it???
Pro Tip: Use The Levers Together
After understanding all three levers, it's important to use them together. When I'm working with a client, we often find they want to revisit lever #1 after realizing just how much time and sacrifice is required to get the original thing. Maybe, after seeing the full picture, they're more willing to adjust the quality of that purchase than they initially thought they were. So don't think of these three levers in a silo. Instead, go back and forth adjusting each one a little at a time until you find your perfect mix of:
The thing you want
on a reasonable timeline
for a level of sacrifice that's in alignment with your values.
As always, thanks for reading!