So you want to be rich eh?
I am lucky to have been raised in what my Mom calls "The cheap family". My parents made very little money but we were always eating healthy, delicious meals, living in nice neighborhoods in posh houses and learning about wanting and needing, buying low and selling high and the value of our own hard work. I can tell you about my success with money, maybe it will help you to live the free life.
First why not understand money so we can think about the full picture. This video is part 1/4 and applies especially to Ontario, Canada but not exclusively. I recommend watching videos 1 through 4. I find them to be accurate and easy to understand. Please do your own research and form your own opinion.
So now that we know our money holds no true value, we can put our energy into acquiring something that does hold value. What holds value for you? Love, knowledge, experience, joy, is it something material? For me I think it is shared happiness, good company and health but also experiences. Money is just a way for us to trade our specific services or products with other peoples unique services or products.
We come into trouble when the things that we want are more valuable than the things we have to offer. You can change this by making your product or service more valuable through improvement of your skills, increased work or by reevaluating your needs and wants. A great example from the culture that I was raised in (in Ontario), is that most people want health. They spend huge portions of their income on trying to fix the problems they themselves create though bad lifestyle choices examples of these expenses are endless; medicine, gym memberships, health care, salves, missed days due to poor health etc. Instead of working to make money to put a band-aid on your health problems, why not invest the time and effort to solve your health problems and keep your money. Exercise, less stress and a healthy balanced diet could mean no more expensive medication for 100's of people I know, but they continue to put their physical well being behind getting more money and buying more medication until they die unhealthy and unhappy. What's the point?
Often I meet people who believe they just have to make more money and then they will have financial stability. This is so far from the truth. In many cases people with the greatest income posses the most debt as with every increase in income we justify another expense, another loan, another monthly payment on something which is culturally acceptable but financially stupid. Should we reevaluate the problem? Is it our income or our spending? (I think you've already figured out what I think).
I believe that the best way to "have money" is to not spend it. Easly said, but not as easily done in our culture of quick fixes, rapidly changing fads and the great importance we place on material possessions. In the past, I felt a responsibility to dress in a way that was clean, current and flattering, in fact I felt a social obligation to conduct my whole life in a way that followed the social standards set out by advertising and popular culture. This is a horrid life. I felt inadequate. I felt stress associated with the ludicrous amounts of money I was spending to keep up with it all. I felt like a slave to the boring jobs I had to work for over 40hours a week to make all the payments on the worthless items that were cluttering my life and casting a shadow on what really deserved my time and hard work; relationships, experience, self reflection and growth.
Do you feel the same way? Try not to spend any money. I can imagine you're going crazy now, take a deep breath and remember that you are not just a organic mass used to stimulate the "economy". I imagine that faced with this challenge many people say "but I'm living a life of poverty, I am already uncomfortable, this is going to be horrible." I feel liberated when I stop spending, I feel like I, Hannah have regained my true value when I stop spending, will it be the same for you? I'm not sure but you will have more money afterwards so what's to lose?
Okay, so I understand we all have financial responsibilities. These are things like rent, mortgage (do you know that mortgage literally means DEATH PLEDGE en français), phones, car payments, loan or credit card dept repayments, insurance, personal loans etc etc etc. Let's call these fixed expenses. Fixed expenses are things that you pay every month or week. Though we call these fixed expenses remember that they are not truly fixed. ie. Using your cellphone less to save $10 in a month lowers your fixed expenses. Paying your credit card (or any debt) off more quickly then you have to is hard work with huge long term benefits and lowers your monthly expenses. Fixed expenses like cable, netflix, gym memberships etc. should now be placed on the chopping block. Remember to prioritize, what is important to you?
Ways that I save money
We come into trouble when the things that we want are more valuable than the things we have to offer. You can change this by making your product or service more valuable through improvement of your skills, increased work or by reevaluating your needs and wants. A great example from the culture that I was raised in (in Ontario), is that most people want health. They spend huge portions of their income on trying to fix the problems they themselves create though bad lifestyle choices examples of these expenses are endless; medicine, gym memberships, health care, salves, missed days due to poor health etc. Instead of working to make money to put a band-aid on your health problems, why not invest the time and effort to solve your health problems and keep your money. Exercise, less stress and a healthy balanced diet could mean no more expensive medication for 100's of people I know, but they continue to put their physical well being behind getting more money and buying more medication until they die unhealthy and unhappy. What's the point?
Often I meet people who believe they just have to make more money and then they will have financial stability. This is so far from the truth. In many cases people with the greatest income posses the most debt as with every increase in income we justify another expense, another loan, another monthly payment on something which is culturally acceptable but financially stupid. Should we reevaluate the problem? Is it our income or our spending? (I think you've already figured out what I think).
I believe that the best way to "have money" is to not spend it. Easly said, but not as easily done in our culture of quick fixes, rapidly changing fads and the great importance we place on material possessions. In the past, I felt a responsibility to dress in a way that was clean, current and flattering, in fact I felt a social obligation to conduct my whole life in a way that followed the social standards set out by advertising and popular culture. This is a horrid life. I felt inadequate. I felt stress associated with the ludicrous amounts of money I was spending to keep up with it all. I felt like a slave to the boring jobs I had to work for over 40hours a week to make all the payments on the worthless items that were cluttering my life and casting a shadow on what really deserved my time and hard work; relationships, experience, self reflection and growth.
Do you feel the same way? Try not to spend any money. I can imagine you're going crazy now, take a deep breath and remember that you are not just a organic mass used to stimulate the "economy". I imagine that faced with this challenge many people say "but I'm living a life of poverty, I am already uncomfortable, this is going to be horrible." I feel liberated when I stop spending, I feel like I, Hannah have regained my true value when I stop spending, will it be the same for you? I'm not sure but you will have more money afterwards so what's to lose?
Okay, so I understand we all have financial responsibilities. These are things like rent, mortgage (do you know that mortgage literally means DEATH PLEDGE en français), phones, car payments, loan or credit card dept repayments, insurance, personal loans etc etc etc. Let's call these fixed expenses. Fixed expenses are things that you pay every month or week. Though we call these fixed expenses remember that they are not truly fixed. ie. Using your cellphone less to save $10 in a month lowers your fixed expenses. Paying your credit card (or any debt) off more quickly then you have to is hard work with huge long term benefits and lowers your monthly expenses. Fixed expenses like cable, netflix, gym memberships etc. should now be placed on the chopping block. Remember to prioritize, what is important to you?
Ways that I save money
- Budget (create a budget and stick to it, see where your money goes so you can reroute it back to your wallet. Having a tough love friend to hold you accountable is a huge help)
- Save a little money ($500 or more can save you from creating debt in dry periods)
- Do not borrow any money (the lender is SLAVE to the borrower, if you can't afford it you don't need it)
- Pay off your debt (run away from debt as intensity as you would from a rabid grizzly, pay it off and keep it off)
- Quit smoking and other stupid habits (this saved me about $150/month or $1800/year plus less sick days, and reduced chance of disease later in life)
- No Tim Hortons, Startbucks, Coffee Time etc. ($5/day on coffee or tea is $1825/year)
- No retail therapy (I guess this saves me over $10k/year, I wear hand-me-downs and thrift shop when necessary)
- Homemade meals (having someone else prepare a meal for you is usually at least four times as expensive and less healthy, if friends want to dine out I offer to cook for everyone, I still save money)
- Bargain shopping (when I do need to buy something I take my time to get the best deal, time spent waiting for a better deal often presents a free alternative)
- No bar hopping ($5 drinks are expensive and are always closely followed by greasy foods and painkillers, that's expensive and unhealthy, have fun for free!)
- Nothing wasted (use things or don't buy them! If something I buy breaks or spoils, I always contact the manufacturer and 99% of the time I receive a replacement. I estimate I save over $1000/year taking advantage of warranties and guarantees)
- Less is more (smaller servings of everything means less wasted food and your consumables, toothpaste, shampoo etc last longer with no real sacrifice)
- Take care of your stuff (duh! take care of it and it lasts longer, no need to buy more)
- Be generous (I give when I can to fill my karma bank up for times when I am in need)
- Think about it (I constantly reevaluate my needs and wants, often I find a free alternative or decide to do without)
- Consider the financial responsibility (think 100 times about any financial commitment and the consequences before you make it)
- Talk about it (a good social network is a great way to save money. You can trade objects, skills, talk each other out of bad spending or just enjoy free company)
Sometimes it's hard, and sometimes you will really screw it up but taking control of your finances is a huge part of your path to "the free life". It is a great opportunity for soul searching and self discovery. Creating a life with richer experiences and less temporary happiness. I am becoming more independent and thoughtful every day, paving my path to freedom with practical skills and the help of my world community.
Wishing you a lifetime of financial freedom, xo H