For some of us, spending less, saving more and investing is as effortless as breathing. Personally, I’ve always been closer to the side of the pole where these things are ingrained into my being. I can easily trace it back to my penny pinching parents who modeled this behavior for me – much to my disdain when I didn’t get the fashionable clothes or cool shoes growing up.
In the long run, I’m glad I had financial discipline instilled from a young age, however, I’m by no means financially perfect. My own financial backyard sometimes isn’t in tip-top shape, I’m sure some of us can relate to this.
Starting back in 2010, I’ve made the effort to tune and improve my finances, realizing in the process that change, any change, doesn’t happen overnight. What’s important is identifying what improvements we want to make, tracking them, and making slow and steady progress along with regular and honest assessments. And giving ourselves credit when credit is due!
Since 2010, I’ve found that I’ve become even more financially savvy and I’m on the road to reaching my financial goal: financial independence by age 42.
For some of us, we may wonder why we are swimming in debt or maybe we feel like there’s never enough money and we’ll wind up working all the way to our death bed. That can be a depressing and hopeless feeling. Perusing our financial backyards we might find credit card debt, credit lines, student loans, car loans, or financed appliances, TVs, and furniture.
If you find yourself in that situation, I can understand. The good news is that improving our financial backyards isn’t insurmountable! Like one of my friends used to say in a 12-step program, “You can’t eat an elephant in one bite.”
What we need to do is break down our financial problems, whatever they are, into easier and manageable chunks. It might start with thinking about improving our finances by spending less and saving more.
How to spend less
Before we delve into a few ways we can design our lives to spend less, I want to point out that recent studies show the salary tipping point for day-to-day happiness is somewhere between $50,000-$75,000. This means any more money hitting our wallets above and beyond that will not make us any bit happier!
I’m sure the quoted salary figures can be hotly debated, but I agree with the results. My yearly expenses would be covered by the take home pay on $50,000, and I live a happy and fulfilled life.
So let’s pretend we are at the high end of that salary range. We might find that $75,000 is barely meeting our lifestyle and all the cool things we like to buy and the fancy vacations we like to take.
What sorts of things might we think to ratchet down our consumerism? Here’s where younger readers get bonus points: if you start out your life not keeping up with the Joneses, your whole financial life will be much easier and your future self will thank you!
1. Live a low impact lifestyle
One of the first things people tell me when they complain about their finances is that all their expenses are cut to the bone. They scream at Mr. Everyday Dollar, “There’s nothing left I can do!”. I tell them there’s always something you can do!
What I usually come to find is their lives and homes are bulging with unnecessary things. For a lesson in consumerism, I’d point you towards the movie The Queen of Versailles about the Siegel family who are building the largest house in the U.S. at 90,000 square feet. They are the epitome of consumerism and wastefulness, and while our lives might not directly reflect theirs, the underlying consumerism that’s ingrained in them affects many of us as well.
You have the choice of what you consume and how much of it. Some people, like the aforementioned Siegels, can’t stop consuming or simply don’t know how to. It’s as natural to them as breathing. If you make the choice to never start, you’ve won the battle. I’ve seen too many people start on a consumerism path and then have an insatiable appetite to consume (I’ve been there, and back).
It’s all the more easy to fall into this trap when we have experts marketing products to us, or we fall prey to paying for convenience, or we envy our friends and family that have shiny new things that we lust after.
Where to start? It might start with what sort of home you live in and where it’s located. Perhaps you live in a home built in 2007 when they averaged 2,521 square feet. Choosing a house that size will cost more to buy, cost more to heat and cool, cost more in property taxes and cost more in maintenance and repair than a house closer to 1,250 square feet.
You’ll want to think about transportation as well. Is your home on public transportation routes making work and errands convenient? Or maybe you can live in a dense urban environment, where goods, services, and jobs are plenty and nearby.
By having a small home and living close to what you need, you aren’t spending extra money on a big house in a suburban wasteland that you waste two hours of your life commuting to five days a week.
And if we choose to live in a smaller and more efficient home, the other benefit is that we won’t have places to store clutter, indirectly enforcing less consumerism.
2. Subscribe to minimal services, buy only things you need, and make sure they’re high quality
I used to buy things I didn’t need: the morning Starbucks, fancy meals out, satellite TV, gym memberships. Then I learned to either go without them or to do them myself. So I make coffee at home, do workouts in my living room, and have Friday night homemade pizza and wine night. Not only am I consuming less, I’m being self-sufficient and saving money.
It’s easy to fall into the trap of thinking we need a house cleaner, cable TV, a lawn service, or lunch out everyday. Or we are in the habit of heading to the corner store for those three little treats we buy ourselves every day.
Starting with The 10 Things You Really Don’t Need, we might think about getting rid of our landlines, smartphones, extra laptops and tablets, multiple TVs, our books, CDs and DVDs, and maybe even one of our cars (which is all the more realistic when we have chosen a smart location to live!).
So when we inevitably need to buy something, we might opt to purchase the lowest cost item when offered similar products. I found that by purchasing high quality items I am spending less because the item lasts longer and typically has a decent warranty in the chance the item breaks or needs repair.
3. Do it yourself
What can we do ourselves that we pay someone to do? Maybe it’s cleaning the house, washing the car, replacing flooring, or doing car maintenance. Believe me, you might be hesitant to try some of these things like car maintenance, but with some internet research anything becomes possible. Having DIY guides available at our fingertips is an empowering way to live our lives, and a luxury our parents didn’t have. Take advantage!
I try to do most things myself rather than pay someone else to for three reasons:
- Figuring things out is fun.
- Feeling a sense of accomplishment in doing something I haven’t done before.
- It saves a lot of dollars!
We live in a society where we continually spend more time at the office, sometimes with more pay, but the trade-off is that we then need to pay other people to do the things we once did ourselves.
Some people do not have the time to mow their lawn so they pay someone to do it. Or walk their dog so they pay for a dog walker. Or to cook their meals so they eat out.
I think it all changed back when the U.S. industrialized, and we did that very, very well. What happened is that every worker wound up doing 40 hours of the same task over and over.
It made products cheaper and companies were able to be more efficient. But it is also when we lost the ability of doing things ourselves. Before industrialization, people worked a little, played more, spent time with family, relaxed, hunted, gathered. It was simple.