Getting to Financial Freedom: Why Extreme Finance isn’t a Good fit for Everyone

Getting to Financial Freedom - Jason Aaron Bragg

Most people have seem the headlines, no doubt. A couple pays off $200,000 in student loans in two years. A Millennial woman packs up her van and travels on the money she earns from online gigs. An extreme coupon fanatic gets $1,000 worth of groceries for 10 cents.

All of these lifestyles hold some appeal. Otherwise, there wouldn’t be TV shows and books dedicated to them. However, there are many downsides to trying to live this kind of lifestyle, many of which don’t get mentioned by the people who live them.

There is a downside to all these seemingly perfect lifestyles that the people who live them don’t mention. Ignoring them puts new practitioners at risk, often leaving worse off financially than they were before.


It’s Not Sustainable

According to the U.S. News and World Report, extreme budgeting rarely works in the long-term. This is due in part to how extreme these lifestyles tend to be.

However, it’s also due to the fact that many promises that these extreme finance lifestyles promise aren’t sustainable. For example, most people would not be able to live in an RV and work at odd jobs they’ve found on a mobile app. This is a piecemeal existence that most people just aren’t ready for.

Additionally, people who live these lifestyles often put themselves in a precarious position. Take those who do extreme budgeting to pay off a large amount of debt. If their finances take a big hit like them suddenly getting sick and being unable to work, they won’t have any money saved. They’ll have put it all toward debt, without giving a thought to how they’d handle such an emergency.


Budget Burnout is Real

Additionally, TIME points out that extreme budgeting and financial lifestyles lead to burnout. People who are burned out will fail eventually.

It’s better to introduce a planned splurge to the family budget and to change up a family’s budgeting system from time to time to keep long-term financial plans sustainable.

Taking steps like these allow most people to work toward a more balanced and realistic financial plan. It’s one that would allow them to to save for emergencies like a job loss and plan for retirement.


Change the Root Problem

Finally, the people who adopt these kinds of extreme financial lifestyles don’t get to the root of the problem.

For example, the couple that has decided to pay off $40,000 worth of student loans and credit card bills in a year and a half on a $20,000 income will not be able to do it without a significant adjustment to their income. This means they’ll either have to get a second job or get help from relatives to make this plan happen.


Worst yet, the people who embark on such a plan usually don’t get to the root of the problem. Until they figure out why they have so much debt and until they change the behaviors that caused them to be in their current financial predicament, it’s only a matter of time before they’ll be back in debt again. All of the scrimping and saving they did in order to pay off their large debts will have been for naught.