When is a cut, not a cut?

I figured I had about 20 thousand dollars in "discretionary" spending last year. You know, for things like new computers, car repairs, vacations, enough food to make me obese, things like that.

So this year, I "budgeted" 21thousand 6 hundred dollars. That's an 8% annual growth rate.

But I had a chat with my accountant, and he reminded me that actually, I only earned about 12 thousand dollars LAST year in discretionary income.

That other 8 thousand? I put it on my credit card. BIG problem at 5% interest.

So, I promised him. I swear. I will cut my spending this year. I realize it's a big problem.

So, I figure, I'm going to "only" spend 20 thousand 4 hundred dollars this year. That's right. I am cutting 11% of my spending.

Wait, you ask. If you haven't spent it, and it's only a projection, and you're still going to spend more than you earned, and you're going to owe a lot more at the end of this year, than last year, HOW EXACTLY IS THAT A CUT?

Now you got it.