The Limits to Just Not Buying
My first reaction to financial stress has always been to just stop buying stuff. Obviously, some expenses can't be eliminated, but a lot of expenses are discretionary — on a temporary basis you can eliminate whole categories. Do not miss that very important key word, temporary. (See also: Emergency Belt-Tightening)
My initial model for this came from my parents. Whenever money got a little tight when I was a kid, my dad would quit spending money. Since my mom bought the groceries and paid the bills, the result was that our fixed expenses continued to be paid while discretionary expenses dropped to zero. I only had limited insight into the household finances, but I could see that the strategy worked. The necessities were covered; the luxuries got deferred.
When I grew up, I didn't stick with the gender role division, but the general strategy remained intact. In my case, money has been a little tight now for going on four years — ever since my former employer closed the site where I'd been working, and I became a full-time writer. My wife and I made modest changes to our fixed expenses — dropping our landline, swapping out the last of our incandescent bulbs. But our big economization was a huge drop in discretionary spending — we quit buying stuff.
Our entertainment budget was cut to a single line item (Netflix). Our grocery spending shifted toward the low-cost end. We just about quit buying clothes or shoes or books or CDs. During the transition we did some traveling, but that too has fallen by the wayside. We even started buying cheap booze (although not only cheap booze).
The result was just about what you'd expect — a sharp and sustained drop in our cost of living. And it was made without a big drop in our standard of living. We didn't buy much in the way of new clothes, but we had plenty of clothes. We got books from the library. We ate out less, but we cooked great meals at home. We do know the line between frugal and crazy.
This drop in our cost of living was sustained; it wasn't permanent. As we approach four years of this, we've started to reach some limits. Our car, which has given us 21 years of trouble-free operation, is showing signs that it won't last forever. I've had to replace two computers. One pair of shoes has worn out, and I can see that two or three other pairs aren't going to last much longer.
So, I offer this as a data point. I'm sure the results would be very different for families with children. But in our experience, as a household with two adults, the length of time that we could go on a buying fast turns out to be three or four years. And it's a genuine three or four years — we don't have a huge backlog of necessary expenses that have been on hold and are now becoming urgent.
That's not forever, but it's a really long time. There are limits to just not buying stuff, but it's still a solid way to improve your household finances. Some expenses can't eliminated, but a lot of expenses are discretionary. On a temporary basis, you can eliminate whole categories.