What It Means to Lower Your Overhead
We’re going to go out on a limb and say something that might sound scandalous: being cheap is not a bad thing. Call it frugal, thrifty, penny-pinching or stingy—here at SELF MADE, we call it smart. Why? Because when you watch your wallet, you are exercising the part of your consciousness that is directly connected to what we, around here, refer to as the big picture. YOUR big picture. So, as you get on your path to become self-made and decide to learn how to lower your overhead costs, don’t ever get offended if or when anyone calls you cheap. Just dust it off and tell them cheap is the new chic.
In the book SELF MADE, Nely Galán talks a lot about the merits of lowering your overhead, as an elemental step to become self-reliant. Lowering your overhead does not simply mean you are actively being prudent with your spending—ultimately, the whole point of the exercise is that, by doing it, you’re really just investing in yourself. Your future self. By spending less on the instant gratification stuff, by default you’re investing on all the big picture stuff.
You don’t have to be a math genius to understand that $100 not spent on fancy sushi four times a month might mean an extra $400 down the line when you really need it, for say, your kids’ school, a down-payment, or a new business you want to start. As Nely puts it, you can have it all—just not all at the same time. There is a time for everything, and when you’re starting the self-made journey, rule number one, as challenging as it may be, is to lower your overhead.
Don’t get us wrong: lowering your overhead doesn’t have to mean misery. As Nely says, “sacrifice is not the same as suffer.” Instead of feeling sorry for yourself for having to budget a little more closely, why not see it as an opportunity for growth, to go deeper, a chance to zero in on what really matters in your life. Take your cues from people like Scott and Gabby Dannemiller, who vowed to not purchase anything for their family other than necessities for a whole year, and who claim the experiment was “90 percent spiritual quest, 10 percent saving money.” If you ask us, we say it’s 100 percent genius—not only because they probably saved a fortune, but more so because they showed their kids that buying stuff is not the answer to quality living.
Now, we’re not saying you have to be that radical (unless you have it in you, then by all means, GO!), but we do believe firmly that are many ways to lower your overhead. So before you whip out your credit card next time, stop, take a breath, get monk-like, and ask yourself: What is the vision I have for my life, and what am I willing to sacrifice to make that vision a reality?
Different Ways to Lower Your Overhead
Make a Budget
You can’t very well lower anything unless you know what you’re lowering it from, right? This means you have to make a budget. You literally have to write down every single penny of how much you’re spending on every aspect of your life. Only then will you be able to see where you to reign yourself in.
Forego Unnecessary Luxuries
We hate to be the bearers of bad tidings, but if you want to lower your overhead, you’re going to have to skip things like that $10 green juice you get after your workout. And while we’re on the subject, you might skip that pricey gym membership, too. Instead, opt for a Rocky Balboa-style workout where you run around the block a few times and do some good old-fashioned sit-ups. Other unnecessary luxuries include things like weekly manicures. Buy a buffer and some polish remover, and we promise you’ll be fine.
Repurpose Your Wardrobe
We know, you really want to “refresh” your staples for the season. So do we. But while you attempt to lower your overhead, you almost have to take the word “shopping” out of your vocab. If you find yourself justifying a new $200 pair of jeans because your old favorite ones are ripped, take said old ones to a seamstress and have them sewn up. That’s true for shoes, too. A trip to the cobbler is way more economical than a whole new arsenal of heels and boots.
Ignore the Fomo
We all feel FOMO (fear of missing out). You may feel it when all your friends are planning a girls’ trip to the Keys at a five-star resort, or when everyone you know has a time-share in the Hamptons, or even if everyone seems to have their kid in some fancy private school, while yours is in public. FOMO rears its ugly head often, and when it does, you have to look it squarely in the eye and say: “back the hell up. I’m good.”
Live Somewhere Cheaper
The glamour of living in a sought-after neighborhood is seductive. But it’s also an illusion. Just because you live somewhere fancy doesn’t mean you are. But if you pocket that expensive monthly rent and opt for something more humble (even just for a stint), you’ll poise yourself to be the fanciest one on the block down the line. So stop idealizing the “hip” neighborhoods, and maybe even consider living with a roommate or with family.
Cook at Home
We get it: after a long day of work it’s incredibly tempting to order in or go out. But the fact is, cooking at home is the cheaper route more often than not. Especially if you’re smart about menu planning and stick to healthy, filling meals such as beans, rice and pasta. If you love your night out, fine. But make it a treat, something you do a few times per month, not per week. And when you do go out, skip the wine. One glass usually turns into two or three, and before you know it, you’ve spent an extra $30-$40 on booze alone.
Pay a Mortgage, Not Rent
Advising you to pay anything might seem counter-intuitive when we’re talking about lowering overhead, but a key part of the self-made agenda is to, at some point when you’re ready and able, to swap your monthly rent for a monthly mortgage. Why? Because once that mortgage is paid off, you flat out own something. When you doll out rent month-to-month, all you do is create more and more deficit.
As Nely says, “don’t be grandiose.” This means: don’t think you have to live in your dream house, drive your dream car, and own your dream wardrobe all at once. It means you train yourself to become willing to live more humbly for the sake of a greater good. It means you start to acknowledge that life is way deeper than just an amassment of things.