Tailor your circumstances to your strategy

Tailor your circumstances to your strategy. Sounds a bit backwards, doesn't it? Most of the time, we take the path of least resistance and tailor our strategy to our circumstances. And that can certainly work if all your finances need is some minor tweaking. But if you have a large goal in mind or you need to address debt, you may need a different approach.

Prioritizing circumstances and strategies

Defining the life you want to lead entails setting the balance between your current circumstances and which strategies you'll employ to reach your future goals. If you look at your circumstances as being fixed, you may have to accept a certain strategy that's available or suits your current situation. You tailor your strategy to suit your circumstances. But if you're willing to change your circumstances, then you may open yourself up to employing a different set of strategies — and this may help you reach your goal faster.

I'm certainly not saying that tailoring your strategy to your circumstances is easy. After all, one of the basics of personal finance is inspired by this mindset: Spend less than you earn.

If you are trying to pay off debt, then spending less than you earn usually means cutting back on some of your wants — things like:

  • Cable
  • Dining out
  • Traveling
  • Upgrading your cell phone every time you're eligible
  • Gym memberships or other subscription services

If you don't have any debt, then you may be able to incorporate more of your wants into your spending plan, provided you are following the balanced money formula or some other budget (or non-budget) that ensures you have enough for needs, wants, and short- and long-term savings.

However, suppose you are in a circumstance where you have so much debt that, even if you cut your budget to the bone, you can't make all your minimum payments? Or, alternatively, suppose you are simply not willing to cut any of life's little luxuries? What then?

I'd argue that if your debt is overwhelming or you have champagne taste on a beer budget, then it's time to move away from tailoring your strategy to your circumstances and take the more aggressive and proactive approach of tailoring your circumstances to your strategy. There are two main ways to accomplish this: practicing extreme frugality and thinking like an entrepreneur.

Strategy one: Practicing extreme frugality

The original mindset mentioned above often means resigning yourself to a longer debt payoff process. However, extreme frugality can tailor your circumstances to your strategy and kick your debt payments or savings goals into high gear. Here are two examples of extreme frugality in action.


If you're spending too much on housing, then extreme frugality suggests moving to a cheaper place. This is fairly easy to accomplish if you currently rent. You may need to wait until your lease ends or pay a fee to break the lease — though, depending on how much you are saving per month, you can break even fairly quickly and move into the saving-money phase.

It is more challenging, though still possible, if you own. If you own your house and aren't underwater on a mortgage, you can sell your home and either buy a cheaper place or become a renter again. Either way, moving is a tougher choice because it requires more effort on your part. Additionally, your new digs will probably come with some drawbacks, like less space, an undesirable neighborhood, and/or a longer commute. However, clocking in at most people's largest expense, a cheaper place can have a huge impact on your bottom line in a short time.


Man commuting to work on bicycle

Transportation is another huge line item in most people's budgets. Between (possible) car or lease payments and related expenses like repairs, maintenance, gas, insurance, and registration fees, driving ain't cheap!

Selling your car and opting for public transportation, Uber, Zipcar, or you-powered modes like walking or riding a bike can free up funds for debt repayment.

Even if you're still making payments and are underwater on your loan, selling your vehicle can make a big enough difference to your monthly outlay. You may catch up and then surge ahead very quickly. And don't think that just because your car's paid off that there aren't savings to be had! Crunch the numbers to be sure. And it's possible to cut costs even if selling your car isn't an option if you're creative.

Strategy two: Thinking like an entrepreneur

No matter how extreme you get with your frugality, you can only cut your spending so far. On the other hand, your earning potential is theoretically unlimited. Thinking like an entrepreneur can help accelerate your debt payoff, or ensure that you are able to maintain a more balanced approach to life while making progress on your debt. Let's take a look at the two categories above from the mindset of an entrepreneur, shall we?

Housing, revisited

Say that you're just not willing to sell your house — whether because it's exactly what you want in the long-term, you're underwater on your mortgage, or some other reason. Your first option for turning your house into an income-producing (or at least expense-offsetting) asset is to find yourself a roommate. You'll have to give up some of your privacy, sure, but it's easier than moving!

Another option to letting strangers pay your mortgage is to rent out your house. Unlike selling, this gives you the option of moving back eventually. Unlike getting a roommate, you can maintain your privacy and your renters can too. While this strategy may have some of the same drawbacks as selling in that you might have to move to a smaller space in a less desirable location, it's only as permanent as you want it to be. Heck, if you're not interested in long-term renters or roommates, you can take advantage of the sharing economy and list your place on a site like AirBnB.

Transportation, revisited

The sharing economy isn't just for homes! Maybe you want or need a nice car. If that's the case, I'm betting that you enjoy driving. So why not make that a strategic hobby and earn some money on the side? Working as a driver for companies like Uber and Lyft enable you to generate an income while setting your own hours. Not many second jobs are that flexible!

Or perhaps your car sits unused much of the time, but you're not willing to take the plunge and go car-less. Peer-to-peer car-sharing sites like RelayRides allow you to rent out your vehicle when you're not using it. You control your car's availability and even the price.

Final thoughts

Tailoring your circumstances to your strategy means deciding what's the most important thing to you and then changing your situation to make that thing possible. If paying off debt is the most important thing to you, then you may have to get extreme by moving to a cheaper place or selling your car. If keeping your home or car is paramount, that may only be possible by sharing them with others.

Either way, we're not talking quick, simple fixes like canceling cable or shopping around for insurance, but rather making a big change to align your spending (or earning) with your values.

How have you changed your circumstances to reach your goals? Share your stories in the comments below!

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5 years ago

This is pretty much how I operate. I lay out my goals, determine when I want to reach them, then figure out what is required…and then comes “what do I need to do” to meet that requirement.

I’m not saying I always meet the goal/timeline but sometimes I do, and even when I don’t I know that I’m further along than I would be if I stretched my timeline to meet my current circumstance. I don’t want to stay in my current circumstance, so then why would I want to custom build my future upon it?

5 years ago
Reply to  lmoot

lmoot, I’d read your blog if you had one.

5 years ago

Just be sure to double-check with your insurance company before renting out rooms in your home and especially before driving for Uber or Lyft. Some insurers won’t cover you if you use your car as a hired car; some home insurance policies don’t cover renters.