What’s Your Sacred Cow?
A few weeks back I met with a client for his quarterly review, and despite the fact that he is doing well with his goals; he still has some more minor work to do. You see, when we first started working together, he was spending about $4,500 a month in living expenses, when he can really only afford $2,800. In his defense, his parents were covering these expenses while he was in graduate school; however, when we first met in January, we knew that the parental support would stop once he started working in August.
Over the past ten months, he has been training hard and making a number of improvements on his finances. His target monthly spend amount is $2,800, and as of our last meeting, he was at $3,200. From my perspective, he has made HUGE strides and come a long way since we started working and now he is in the final stretch.
Cutting expenses until reaching sacred cows
If you read my book, Train Your Way to Financial Fitness, I would have said that when we started working together he was Financially Fat, and now he has reached the Financially Skinny phase. The Financially Skinny phase is similar to losing the last 5 pounds of a 50-pound weight loss journey. His first 45 were relatively easy to lose and now it is more important than ever for him to focus on the fine details.
As part of our review, we decided to sketch out a monthly budget for him to figure out where we could cut the minor expenses. For me, his first step in his budget should be his savings target, so we wrote it down first, followed by all of his monthly expenses he has to pay that are fixed. We ended the list with his variable expenses, which is where we figured we could find the solution.
At the end of the day, he has a pretty large monthly expense around healthcare and we debated on what to do about it. I didn’t want to tell him he had to forgo something that may be helping him; however, it really is a large expense and cutting it would put him right where he needs to be with his monthly expenses.
The Sacred Cow Reveal
I started to tell him that we could cut some of his savings budget to make room for his healthcare choice and he said, “No, that’s your sacred cow, and I want to protect it.” After that, he pointed to his monthly parking and said, “This is my sacred cow.” Then he pointed to this healthcare expense we were debating and said, “This is no one’s sacred cow, so we have to figure out how to remove it.”
We discussed a number of alternatives for him; however, over the next 20 minutes, the phrase “sacred cow” came up more than a few times, and it struck me how important it is to have a sacred cow when you are budgeting.
On Monday I spoke about having anything you want, but not everything you want and the easiest way to get anything you want is to determine your goals. However, a better way to phrase this is to determine your sacred cow(s).
What is so important to you that you would protect it at all costs?
It meant a lot to me that my client wanted to defend my sacred cow, but it was also important that he had his own. The great news is that both of our sacred cows worked within his budget, so now it is just a matter of cutting something that isn’t that important.
My client felt much better about cutting the unimportant expense or finding a less convenient but cheaper alternative as long as doing it protected his sacred cow. On Monday, I shared that my son’s education and home were important to me, they are my sacred cows, and as long as I have those covered, cutting everything else really is an easy task for me.