I’ve been thinking a lot lately about difficult situations. When is enough enough? How do you know when you should just focus your energy elsewhere? Sometimes life can really make you feel like you are beating your head against a brick wall. A lot of the articles on Enemy of Debt talk about persevering. However, there may be times when it is a smarter financial move to just give up.
Here are some financial examples of when you might want to say, “Enough!”
Making payments on something that isn’t worth it
This could be a house, car, or something else. How do you know when you should just sell the thing and take the loss? With houses, I’m hearing a lot people saying that they plan to hold on to a house until the market improves. This plan may work, but what about all the interest money you are paying in the mean time? When you subtract the money that has gone to the bank for interest—money that you will not recoop—is it still worth it hold on to that car, house, or other item?
Throwing Good Money After Bad
Have you ever had an item that you bought, only to then repeatedly sink more and more money into it? It can be hard to say, “Enough” when you’ve already invested a lot in something. Still, something that is draining you financially is a good thing to give up! Don’t think about all the money you already lost in the item. Just resolve that you aren’t going to lose any more!
Living a Lifestyle that is too Expensive
Some people will tell you that they HAVE to live in a certain neighborhood, town, or apartment for one reason or another. Or they’ll say that they HAVE to have a cell phone, cable, or some other monthly expense. There’s nothing necessarily wrong with living in a nice area or having a cell phone, but if you are trying to cut back financially it is unwise and untruthful to label these things as necessities. Most things in the average American lifestyle are wants–not needs. Identifying them as such can help you give up the things you may need to, in order to get on a better financial path.
Making Impulse Buys
Although I usually make most of my family’s food from scratch, sometimes I need a convenience food item for nights when I am tired. If I know there are times when I will feel this way, its best to plan ahead so that I’m not rushing and feeding my family something we really can’t afford. Impulse buys are a great thing to stop. Especially if I’m getting burned by the same one over and over. For example, if I know my family is going to hit me up for take-out pizza every Saturday and that’s not in the budget, then I should plan ahead by getting stuff to make pizza at the grocery store. Sometimes I encounter an expense that I truly could not have planned for, but usually I find if I had been better prepared I wouldn’t have been tempted by that impulse purchase.
Relying on credit cards for savings or to float expenses
I’ve been guilty of this bad habit. It throws off my budget every single time. Why do I continually fall for the illusion of debt as free money? If I pay upfront in cash, credit card bills can’t surprise me later. Using credit is a great thing to give up!
We all develop bad habits and unhealthy ways of dealing with things. In finances, these difficult situations can manifest themselves in behaviors that have an actual dollar cost. The key is to recognize what you need to give up and then begin the journey of doing so!
When has giving up been a smart move for you financially? What did you give up?