I was introduced to the simplicity and minimalism movement years ago through Becoming Minimalist. Joshua Becker, who runs that site, is now a friend.
Simple living fits beautifully with financial independence. Why? If you choose to live simply your spending naturally decreases, making your number lower.
And with a lower number and more money to save, you can drastically reduce the time it takes to become financially independent.
This is the journey Lisa and her family are on. I met her through the comments, and asked her to share her story with you.
Lisa, what’s your story?
My husband and I both grew up comfortable, but like many young people didn’t have much guidance with college, careers, or money. By default we both ended up working at factories.
I started at a cheese factory at 19, not knowing what I wanted to do, and having no direction. My plan was to stay there for no more than five years while I figured out what I really wanted for a career.
As so often happens, our lives changed to include a mortgage, two children, car loans, eating out, and credit card debt. Five years turned into thirteen before I knew it.
I felt like I couldn’t leave because without a degree I wouldn’t be able to find a job any better than the factory, and I had also grown complacent with the job. It was comfortable and secure, making it hard to leave for something unknown.
Things started to change four years ago when our family adopted a plant-based diet. I hadn’t felt happy or fulfilled at the factory for a long time, but suddenly the product I was helping make was no longer in alignment with my values.
Around that time my son started junior kindergarten, and I was scheduled to work Saturday overtime. I was backing out of the driveway to leave when my four-year-old son came running over to the car window begging me to stay.
It really hit home.
I told him I wished I could, but that it wasn’t up to me. He started to cry quietly, and said, “But I will hardly get to see you anymore.” It really made me think about what my priorities were, and why I was allowing a company — to which I was quite replaceable — dictate when I could see my children, to whom I am not replaceable.
Over the next few years I found Mr. Money Mustache and The Minimalists blogs, and they dovetailed beautifully into a new lifestyle for us. Up to that point we had lived a very normal existence, but these blogs talked about living simply, and focusing on the things that are truly important to you.
We took this view to heart and purged unnecessary items, reviewed bills to see where we could cut back, and downsized from a 2,200 square foot bungalow to a 1,300 square foot house on a property one quarter the size.
This might seem like a step backwards, but we moved within walking distance to better schools for our kids, have cheaper home maintenance and utilities, went from two vehicles to one, have more time for leisure activities, and live in a beautiful city with many free events.
Plus, we have more money to invest, and will pay off our mortgage in three years instead of fifteen.
We try to focus on experiences — like family trips and spending time with our horse — rather than material items, and have learned that kids don’t need much to be happy. Many times I’ve planned a costly outing and the things the kids enjoyed about it the most were the least expensive parts: the street food, people watching, looking at a free exhibit. They just want to spend time together.
Eventually, the job I thought was comfortable and secure was an illusion. Being employed by someone else always leaves your future in their hands, and I decided that it was no longer the job for me. I wanted to be in control of my days, spend more time outdoors in nature, and be available for my children while I had the chance.
I realized I only had 18 years with each of them at home, and had already lost one-third of that time with my six-year-old son, so I should spend the rest of it wisely. I decided that opening a home daycare would best fit all of these needs, while providing a good environment and healthy food for other children when they had to be away from their parents.
I’ve been working for myself for a year now, and wish I had done it a lot sooner!
Thinking about striking out on my own for so long was a lot harder than actually doing it, and we’ve been surprised at how much extra money is available now that we do not pay for our own childcare, have one less vehicle, and rely much less on convenience foods. There is no certainty in life, but things are going very well so far, and having the intensity of my efforts benefit my own family is worth it.
I am also taking a course on natural nutrition, and hope to offer nutritional consultations as a side business when I complete it.
What’s your earliest experience with money, and how has it shaped your mindset?
When I was about ten years old my dad was laid off from his job in the tech industry that he’d held for a very long time. I remember my mom broke the news to me and my sister when we were on the way home from a trip. She said that it would be our last trip as a family for a while, and that we would have to buy our clothes at Goodwill now.
I didn’t ask for things after that, and there was a fog of depression over our household for a very long time. I think mostly because my parent’s definition of success was very attached to having lots of money and a big house.
Looking back, it helped me become more independent because if I wanted something I had to find a way to get it myself, and learned there are always ways around a problem. I worked in exchange for horseback riding lessons, and got a part-time job for any extra things I wanted.
And really, my life at that time didn’t change very much. The things I valued such as seeing my friends, holiday dinners with family, or reading a good book cost very little. Having fun, enjoying the company of others, and happiness are not dependent on money.
I know now that by living simply so that my needs are met and my wants are few, I am much less attached to status symbols such as a big house or fancy car for my mental well-being. We can reframe our view of a situation from something we are losing into something we are gaining.
Instead of downsizing our house being the loss of a status symbol, it can be viewed as more time, more money, and quicker to being mortgage free.
How much do you spend and save?
Our combined income per month is $4,700 after tax, and we receive a government child benefit of $500/month, so our total household income is $5,200/month. Our bills — mortgage, food, gas, horse board, entertainment, etc. — are $4,000/month. We save the $1,200/month difference.
Our mortgage is on accelerated bi-weekly payments, and we have added another $700/month to it. After the mortgage is paid off in the next three years we will direct those payments into savings, which will raise our savings rate to 62% of our income.
We know that paying off the mortgage sooner rather than directing it to savings is postponing investment growth, but it is peace of mind for us because we both really hate being in debt!
Any tools you use or a habit that helps you?
We don’t budget, but every time money comes in we pay off all the bills that are due before the next pay day, and leave $200/week for groceries and $30/week for gas, then whatever is left gets transferred to savings right away.
If there are any unforeseen expenses or splurges we have to consciously transfer the money out of savings to use it, and it feels like we are robbing ourselves! If we were to leave the extra money sitting in our checking account it would be easy to justify buying a couple of coffees or getting lunch at a restaurant, and that money would quickly disappear. Once the savings account reaches $5,000 we move it to the investment account.
We also do a frugal month challenge about every six months that comes from the Frugalwoods blog. The first time we did the challenge we found an extra $800 that month!
For the whole month we aim to spend only on essentials, review bills to find added savings, and get extra money by selling unused items or picking up a bit of extra work. We cook more meals from the freezer and use cheap healthy staples like beans, lentils, and rice.
It has been a big eye opener as to how and where money is being spent, and has forced us to come up with free entertainment ideas, which often turn out to be more fun anyway. Things like picnics, going to the beach, free live music and outdoor movies, having a campfire in the backyard, or catching minnows and crayfish in a river.
What’s the biggest money challenge you experienced, and what steps did you take to overcome it?
We are relatively new to managing our own investments, and it has been hard slogging through all the information to decide where to put our money. I always had a pension through work but paid little attention to it until I became self employed. I needed to learn more about it, and The Simple Path to Wealth by JL Collins helped a lot.
It’s not that hard to open an account and buy an ETF with Questrade or one of the other great companies out there, but I was too paralyzed to take that first step because of information overload and the uncertainty that I was making the right choice.
The first step really is the hardest for a lot of things, but the more I do it and learn the world doesn’t come crashing down, the easier it gets. Most things are easier than I expect them to be.
What’s one money mistake you made, and what did you learn?
A few years ago when we were selling our house I became so focused on the exciting prospects of our move, and stressed out over the process, that I allowed the sale to be rushed. It ended up costing us anywhere from $10,000 – $30,000 in lost revenue.
I learned that sometimes professionals that are being paid to advise you may not have your best interest at heart, and even when you feel stressed or pressured by others to make a quick decision you can still stop to think things over. There is almost always time.
A false sense of urgency can overcome your better judgment, and a lot of businesses prey on that. So now I try to slow down and remember that it’s my choice, no one can force me, and there are always more opportunities around the corner if I pass.
What money advice would you give your 22 year old self, and if you can place us when you were that age.
At 22 I had been at the factory for a few years, and was well on my way to racking up debt. I thought I didn’t have enough money to begin investing, which is so laughable now when I realize how much I was spending on fast food and consumer goods!
I would tell myself to spend on things that would give me long-term gratification, and invest as much as I can. If I had done that I likely could have been financially independent by now.
I would also tell myself to not be so emotionally attached to money, that it is a tool to get to where I want to be, not an end in and of itself. At that age I was striving to have money but didn’t have a plan for how to use it once I got it — money needs to be put to work.
And finally, don’t automatically think that others know what’s best for you just because they are older or are professionals. A lot of people are flying by the seat of their pants, professional or not.
What item, for $100 or less, had the biggest impact on your quality of life?
My e-reader. It has given me access to books that are difficult to find in hard copy such as How I Found Freedom in an Unfree World by Harry Browne, Get a Life: You Don’t Need a Million to Retire Well by Ralph Warner, and Early Retirement Extreme by Jacob Lund Fisker. These books have changed my life.
And, it has saved me trips to the library and removed the clutter that books would have added to our home, which is important for our simple lifestyle.
1. Figure out what makes you happy. The worst thing is a deathbed regret that you’ve wasted your one chance at living, and it seems the happiest people I talk to are the ones who feel in control of their lives, and the ones who are in control of their lives are the ones who live simply.
2. Reframe loss as gain. It’s challenging to go from an expensive lifestyle to a simple one, but when you stop caring about how big your house is or how much your car costs you gain inner riches. I like that Lisa was able to see this.
3. You are what you do repeatedly. We know that success comes from being disciplined and persistent. Why? Because for anything in life, repetition will get you to where you want to go.