At the beginning of 2008, Logan and I sat down and made some big commitments and we followed through with our goals of living a smaller, debt free life. For us the key to staying on track was writing down our goals and checking back in every few months to measure our progress.
A number of blog readers and friends have asked me how the heck to live a smaller, debt-free life. So here are a few tips that might help you:
- Follow the program in Your Money or Your Life. If you want to understand more about finance and money management, pick up a copy of Your Money or Your Life. Why am I advocating that you read this book? Economic uncertainty, layoff’s and other world events have many people stressed out about money, how to spend it, save it and invest it. This book lays out simple steps that will help you gain a better understanding of money.
- Budgets? Budgets are like diets. They don’t work. To get around budgets we’ve developed a monthly tabulation sheet, that allows us to evaluate our spending and examine our true consumption patterns. Our general expenses like rent and food stay constant, but we’ve found that our monthly spending pattern is never the same. Usually there is some kind of weird expense that pops up. Even though we watch our spending, we know that it will fluctuate. Thus, it is better to be mindful of each purchase.
- Live within your means. Don’t buy stuff you can’t afford. This probably sounds like cliche advice, but how many people do you know that charge stuff on their credit cards all the time? Know the true expense of items by converting the price of stuff into your labor cost to earn it.
- Wear out your stuff. Before you buy something new (like shoes), wear them out first and get repair estimates before buying something new.
- Plan in advance. Planning drastically reduces the dreaded impulse buyer regret. For instance, make lists before you go grocery shopping and research the best deals for things like clothing and food.
- Evaluate your living situation. If you’re paying an excessive amount to “own” or rent, take some time to evaluate the value of your location and the space you use. Examples of living small in this journal demonstrate how very little we need to live.
- Buy local food. Healthy, organic, and fair trade foods can be very expensive in stores. To obtain this great food inexpensively look for a local farmer’s market to save money. Farmer’s markets allow you to purchase directly from the producer without the overhead cost of brick and mortar store fronts.
- Cut out the unnecessary shopping trips and stay out of the mall. If you don’t go shopping, you won’t purchase items on impulse and your wallet will stay fatter.
- Before you buy anything, ask yourself these 3 questions:
A. Did I receive fulfillment, satisfaction and value in proportion to life energy spent?
B. Is this expenditure of life energy in alignment with my values and life purpose?
C. How might this expenditure change if I didn’t have to work for a living. What expenses would increase, decrease or disappear if I didn’t go to work everyday?
Living a smaller lifestyle has changed my perception of consumerism and how so many of our spending choices negatively effect the economy, the work we do, and the planet. I wish I’d stumbled across the concept of small living earlier in my life.
Would you add anymore tips to this list?