Working for money is not a nice place to be. You only work for money when you can’t do without it. When you live well below your means, you firmly ensure that it works for you. The good news is that you can work towards turning the relationship around with a few changes to your lifestyle. A few ideas –
1. Drink more water. The cost of carbonated beverages and alcohol add up over time. Water is largely free, incredibly tasty and, as an added bonus, great for your health too. Easy way to save $35-$40 per week / $1600 per year.
2. Eat food at/from home. If you need a lot of food to be energetic, consider taking a few simple sandwiches and fruits with you. The biggest benefits come when you begin packing lunch. And, definitely eat dinner at home. That can save about $140 a week / $7280 per year.
3. Develop a taste for low cost fun. Every weekend needn’t be expensive. Try board games, pot luck dinners, and simpler gatherings. Yes, I recognize that this list appeals more to introverts. Mix it up a bit perhaps.
4. Allow space in your budget for some guilt free spending. This way, you keep your willpower reserves intact and also enjoy your money.
5. Spend money where you spend your time. If you spend 12 hours on a computer desk – invest in a nice screen, a comfortable keyboard, and a nice mouse. Don’t skimp on stuff that you will use a lot and definitely don’t skimp on tools that help you get more done – e.g. if you can clear more emails or listen to more books on your commute on a tablet, invest in one. Similarly, don’t compromise on a comfortable duvet. If you don’t sleep well, the rest of your day is useless.
6. Invest in your long term happiness by spending on great experiences rather than things. Go for that iconic trip to the Canadian Rockies or that road trip to the Gold Coast. They’re memories that will stay with you forever. You get used to regular luxuries (e.g. an expensive car) real quick.
7. Invest in your learning. Don’t skimp on a good education or books on a regular basis. These things generally pay themselves forward with better jobs and higher earning potential.
8. Give. Giving helps us gain some perspective about how much we have. Happiness is key to spending wisely.
9. Invest for the long term in indexes. I gave estimates on the first two items just to illustrate the power of long term decisions. Assume you have around $10,000 this year by saving on food and water and invest in an S&P 500 index that Warren Buffet recommends, that will be worth $102,000 in 40 years assuming a standard 6% real return. Imagine if we did this every year and if the amount were bigger with the aide of low cost fun and other savings.
Money is just a tool. We just need to learn how to use it well so it doesn’t get in the way of our happiness. Live frugal by investing in things you really need. Spend consciously.
It may sound a bit boring.. but, not having to worry about whether you have enough money for this or that sure is a lot of fun.