The Step-Down Principle

Many of us sense the need to reduce our debt load and save more. How can we do this when money already seems to be tight? Increasing income may be an option for some, but for most, the answer lies in reducing current expenses, which can seem frustrating at times. As a financial counselor and educator, I have used what I call the “step-down principle” to help many people successfully reduce their expenses.

To use the step-down principle, imagine a staircase. Think of a purchase you will be making and list the most expensive way to purchase that item on the top step. Then go down a step and list the next most expensive way, continuing down until you have the least-expensive option on the bottom. For your food budget, for instance, the top step might be a restaurant. Subsequent steps might include a fast-food outlet, frozen or already prepared food from the grocery store, mixes from the grocery store, and cooking from scratch.

Decide which step you are most likely to use. Then see if you can step down one or more steps. The savings can be tremendous! If you were planning to buy pancakes at a restaurant, for example, but stepped down to buying a mix and cooking them at home, you could save significantly! Even if you do not cook from scratch, you can still save a lot of money by stepping down one or two steps. The step-down principle also works well for purchasing clothes, entertainment, and household and personal items.

Using the step-down principle can bring you peace of mind as you reduce expenses and reach your financial goals.

Alena C. Johnson, Smithfield Second Ward, Smithfield Utah Stake