I went through a cash crunch in my business a year back, 16 months to be precise….
For 4 days, I shut out the world, and re-looked at my expenses, which were HUGE..!!!

I shut my big office (1000 sq ft) in an upmarket area and moved to a much smaller and cheaper office closer to home – saved on rent and commute cost and time as well.

Pruned staff, only non essentials, staff which I had kept to fill the office and got down the working team from 8 to 5.

Net result – my 5 months’ expenses now last me for a year !!!

Restaurants were a huge part of our expenses and when you consider the 9.25% sales tax rate now in California, plus the 15% tips, plus having to feed the parking meter, not to mention the gas we need to put in the car for getting to the restaurant… it all adds up to a $20-$35 meal EACH TIME! The good thing about this economy is that I may just learn how to cook.

Neil,

That’s it – people don’t want to face the possibility of making a choice and admitting that they have the power to decide to live at a different expense level. Instead of saying, “but this is how much we need to live on every month,” now they get to say “for some reason we chose to spend $250 eating out” or “I spent $300 on 2 pairs of shoes that I never wore.”

Most of the time, it is a fear of confronting the use of purchasing as a way to fill up some form of internal emptiness that cannot be filled up with material things. That can be a painful admission for people, as well as fearful, because once admitted, they get to choose if they want to do something about it.

Jane Chin

I think I lot of people are afraid to look too closely at their household finances. They fear that with the data in front of them, cutbacks would be unavoidable. This is a shame, because so much is wasted, in terms of money and resources.

The courage to look unflinchingly at one’s financial situation, be it personal or within one’s microbusiness, is a key skill and one we should all be trying to develop.

Thanks for your post, Jane. I look forward to reading more!

Neil Moodley