Spend Less, Live More – The Mantra of Financial Independence

Spend less. Live more.

Four simple words that hold so much meaning. Each a respective philosophy on their own, but also happen to complement each other perfectly.

In a society of over consumption and people drowning in debt, sometimes it’s nice to take a step back and look at reality from a sane standpoint. Part of curating your own life is the ability to self-reflect, become aware of the bullshit around you, and take action in a positive direction that’ll benefit you for many years to come.

We’ve been living a version of this Mantra now for the last few years. Lately, we feel like we’ve got it more nailed now than ever, even though we admit that we’re still learning a lot. We want to share with you what we’ve learned so far and how you can apply this Mantra to your life.

How Will This Mantra Accelerate Your FI Goals?

We joke it’s our super power to just Not Buy Shit. But really it’s the most powerful thing you can do to get rich. “Why’s that?”  You might wisely ask… Well, let me explain.

Every single dollar you earn is yours to keep. On payday you have a 100% savings rate. Then through the power of choice, you make these things called purchases and you spend your money. Sometimes it’s on necessities like a roof over your head or food. Other times it’s not.

Many people use up all of their paycheck and then rely on the next one to fund whatever it is they’re going to consume next. But what if I told you all you had to do was for the most part Just Stop Spending on things you don’t need? Then you’ll be left over with 10%, 25%, 50%, or maybe even more of your hard earned dollars. And once you have those dollars left over, you immediately put them to work for you. That’s called investing.

A 50% savings rate is a great goal to strive for. And a rate above 60% means you’ll be able to start from a $0 Net Worth and hit your FIRE number roughly within 10 years. Now that’s powerful. Remember, your FIRE number is roughly your annual expenses times 25. And if you need a refresher on the whole Financial Independence, Early Retirement stuff, check out our Beginner’s Guide to FI.

You are now to view money as little green employees whose only purpose is to provide with you what you need (rent, food, etc.) and then to provide you with passive income and returns on investment. Any purchases deviating from this must be made with the highest level of intentionality in order to ensure the item you’re buying is actually going to bring you value and happiness.

 

The Principle of Simplicity

The best part about this approach is that it’s simple. You can only screw it up by buying more things. Some people will struggle with this because it’s going to take a healthy dose of self-discipline. It’s simple, but not necessarily easy.

The more money you make as your employee each paycheck, the more passive income you’ll earn for your future-self. This also allows you to Live More because you’ll be free from most responsibilities and obligations many people are handcuffed to. And at a much, much earlier age.

Many people are afraid to “sacrifice” conveniences and luxuries now in their lives because they don’t have the foresight to see the major benefits of being financially free. Don’t be one of those people. Remember, financial freedom will enable you to spend your life doing exactly what it is you want to do, every single day.

Living simply also means you need less in general and for your FI number. Financial independence and early retirement isn’t about making crazy sacrifices or being a super-$500k-a-year partner at a law firm.

The key to financial independence and early retirement is through your daily decisions to use only what you need and to learn how to have fun without spending money.Click To Tweet

Now if you’re really attentive, I said at the beginning of this example that, “every dollar is yours to keep”. That’s only partially true. And that’s because there’s this thing called taxes. There’s a great way to keep more of your hard earned money by utilizing pre-tax investing – a topic for another post.

 

It’s About So Much More Than Money

Sometimes we get too caught up talking about dollars and cents. I like to take another step back and look at the even bigger picture here. Things like Happiness, Joy, Fulfillment, Fun, and Meaning.

I know these words resonate deep within you, just as they do me. That’s because these words represent our true goals and purposes here on Earth. Therefore, while money doesn’t buy you happiness directly, it buys you two major things that will bring great joys to your life that are quite difficult to describe: freedom and choice.

When you are financially independent you have the freedom to do whatever you want for work. You have the freedom to choose to live generally where ever you want as well. Being able to make these choices freely is a great privilege that should not be taken lightly.

Some of you may be adverse to this due to being afraid. Afraid of actually having control of your life. I was too when I first heard about this. I didn’t think I’d actually find something useful or meaningful to do. It’s a challenging notion if you’ve been following society’s script up until now.

 

Hedonism – Sounds Better Than It Actually Is

Another amazing benefit of Not Buying Shit is avoiding Hedonism or Hedonic Adaptation.

Defined, Hedonism is a school of thought that believes pleasure is the highest aim and proper aim of human life. And while this sounds absolutely AMAZING, it’s actually not. Sorry!

Hedonists don’t typically realize they are this way. Lifestyle creep is a huge issue amongst literally anyone who makes above $30,000 a year. The more money you earn, the more things you buy to keep up with your larger than life salary. Bigger house, upgraded car, all new furniture for your huge new house, a second vehicle, expensive wines, expensive vacations to exotic locations, fancy restaurants multiple times a week, ad nauseam. I could go on forever with that list depending on how much your salary continues to rise.

When is enough?!

Living simply makes you appreciate the things you have. Therefore, not upgrading all of those things. Not eating out excessively, or hiring a fleet of people to do basic tasks for you. It teaches you how to appreciate the time you do have through being content. Contentment is shown to be one of the best ways to attain happiness, that’s why stoics and zen buddhists alike practice this concept.

Compared to the majority of the World, people in the West have it really damn good. Millions, maybe even billions of people around the world right now are living on far less than you. Surely not all of them are less happy than you.

Indulge in luxuries from time to time but remember the concept of Spend Less, Live more. And be just as happy with or without that luxury. That way when you lose it you’re no better or worse off than before.Click To Tweet

When making these one-off luxury purchases, ensure it’s only done with the highest level on intentionality. You need to be absolutely sure it’s going to make you happy. This is not always easy to do because our brain trick us into thinking we need many more luxuries than we do through a process called justifications. Thankfully we also have rationality and that’s going to be your key to striking the proper balance here.

 

Quality Over Quantity

At this point you’re probably thinking, “This Seth guy is extreme! He doesn’t want me to buy ANYTHING.” Fair enough, but let me counter that with this: When you buy something, make it count.

This comes down to being more intentional (living more) and being less mindless with your spending (spend less). See the relationship between these two principles now? It’s not about NEVER buying anything, although there’s people out there who do almost that and good for them.

For the rest of us, we’re going to buy stuff. The key is to not buy too much and only buy stuff you need, that’s going to last as long as possible, and that’s going to actually bring you happiness – not just convenience.  

 

Value, Not Price

A lot of people would also say, “Seth, you’re so CHEAP! I can’t believe you’re depriving your CHILD of…” and that’s basically where I stop listening.

Let’s be clear: This is not about being cheap or deprivation. It’s about being frugal. Which really just means to be intentional and put some damn thought behind your decisions! We are the opposite of deprived despite our simple living standards.

So yeah, my child doesn’t need an iPad or “Screen Time” or the latest clothing item from Target or yet another plastic toy from China. That’s because there’s not much value in those things to him right now, possibly ever. Instead of that approach we play outside, we explore and get dirty, we read books and act silly – a focus on experiences over disposable toys.

Now, even if you don’t have a child, all of this applies to yourself as well. This notion all boils down to knowing what I need and spending the right amount of money for it. That’s called value. In my experience the best way to find value products when you need them is to do the math. This confirms your choice and ensures you’re being intentional in each purchase.

For example, I recently needed a new tire for my car. During the week I rarely use my car because I take a bicycle to work – this bought me a little time to research a few things. First, the shop that had online appointments for a time when I was available. Second, I popped open a spreadsheet and quickly did the math. Comparing the various tires based off of their quality and mileage rating. I calculated how many cents it cost me per mile I drove on each tire and the results were really neat. The cheapest tire was by far not the best value. And the highest quality tire didn’t necessarily mean the longest lasting in terms of miles. This helped me to not spend too much, but to make my dollars stretch – all for an extra 20 minutes of research.

 

Spend Less Money

People waste hundreds if not thousands of dollars a year on dumb things. Things they don’t even realize they could definitely live without.

Simplicity and Enough. These two words should be the driving force behind the mindset that you’re beginning to develop. Here’s a few tips we’ve implemented in our lives to help us to avoid becoming Spendypants.

  • Strictly follow the 72-hour rule before a purchase.
  • Setting a reasonable budget and actually following it.
  • Utilize your local library and/or friends for books.
  • Rent or buy a smaller home than you think you need.
  • Utilize bicycles, walking, and public transportation instead of a vehicle. It’s safer, too.
  • Save up for your bigger purchases and pay for them in cash. Do not finance stuff if you cannot afford it. Opt for higher quality, better value items that will last as long as possible.
  • Never carry a balance on a credit card, unless the interest rate is 0%. EVER.
  • Buying used items when possible.
  • Finding free or affordable hobbies / ways to occupy your time.
  • Cook a strong majority of your meals at home.
  • Shop smarter at the grocery store. Less packaged foods and more whole foods.

What tips do you have for spending less money that you’ve successfully implemented? Let us know in the comments below.

 

Spend Your Time Wisely

Time is the most valuable resource we have. We can’t make more of it so you ought to learn how to use the little we have to the best of your ability. Here’s some things we’ve implemented to help us spend more time doing things we actually care about.

  • Quit watching TV shows and movies (so much). This includes streaming services such as Netflix. Replace this time with reading 90% of the time as a general rule. 5% for amazing content on YouTube or other streaming services on topics you’re really passionate about. 5% for mindless stuff (because it’s bound to happen to all of us).
  • Eating out at restaurants and drinking at bars. Cook your own food, have dinner parties, learn how to make fancy cocktails for a 10th of the price.
  • Commuting. It’s stress inducing and not all that safe. Plan ahead and rent or buy close to work, or work close to where you choose to live.
  • Quality time with friends or family.
  • Finding hobbies you’re passionate about.
  • Find your favorite way to take care of your body – strength training, running, biking, swimming, yoga, walking, etc.
  • Take courses or read books on topics you’re curious about.
  • Plan your days and weeks (being intentional with your time)

What tips do you have for spending less time on activities that don’t bring you value that you’ve successfully implemented? Let us know in the comments below.

 

Live More!

Now you’ll begin to see that a lot of these things overlap: cook more, read interesting stuff, try new things, do it yourself, etc. I won’t continue to repeat myself, but I want to emphasize something here. If you haven’t yet, go back through our Beginner’s Guide to FI and check out the section What Do We Believe In? This will give you a lot to think about in regards to living more.

One of my favorite books, The 7 Habits of Highly Effective People by Stephen Covey emphasizes that you should keep four areas in your life “sharp”. Those are your physical body, your mind, your spirit, and your social side. You’ll notice a strong parallel to what we’re talking about here.

Let’s go back to valuing more things like human interaction and Nature. This means inviting people over for dinner or going outside to do something fun – camping, hiking, playing at a park with your kids, the list is endless.

Here’s a mental hack that will help you to realize how GREAT life currently is… Imagine back to when your ancestors, where ever they were from, didn’t have electricity. They didn’t have water filters. They didn’t have Screens. Think pre-industrial revolution and beyond. Feel free to go as far back as you please. The farther you go back, the more you’ll appreciate all of the modern luxuries and conveniences we have. Even something as simple as the bicycle is such an amazing luxury. It’s cheap, it’s a great workout, and it’s 10x faster than walking. You don’t even have to feed it (gasoline, electricity, hay if you’re thinking horse and buggy).

Now realize that many of these people, despite not having all of these things we have, found Happiness, Joy, Meaning, and Fulfillment.

 

Don’t Make This Harder Than It Should Be

Spend less, live more – this is the Mantra of the Financially Independent, of the Early Retirees, and of the New Way of thinking about money and about life. We hope you’ll choose to embrace this mindset and way of life just as we did.

Spend less than you earn. The less the better. Be grateful for what you have now. Enjoy luxuries and conveniences while they last, but be just as happy when you don’t have them. Start spending more time in Nature. Make decisions for your future-self. Make conscious decisions with everything in your control: your thoughts, your goals, your actions.

Saving money will be so easy and you’ll be FI before you know it. Just like how I forgot this blog post was about money, you’ll soon begin not thinking about money either and you’ll start really enjoying life. Maybe I’ll see you along the bayou. I’ll be the guy with a 4-year old and a sketchbook. 

Seth's bicycle parked along the Buffalo Bayou in Houston, TX.

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