Your journey to financial independence (FI) is a personal thing. You get to choose how much you spend, how much you save, and therefore how long it will take to reach FI.
You decide what you spend your money on. This means everything good gets to stay.
Live better while spending less
During the last 5 years I have increased my savings rate to over 75% of income.
Over that time life has felt more full of abundance, more satisfying, and more fulfilling with each passing year.
The strange thing is that the changes made to reduce spending aren’t very noticeable from the outside looking in. Our lifestyle looks the same as it did before we started making improvements.
We still live in a beautiful house, we still travel and appreciate the beauty of the world, we have nice things, we can listen to all the music in the world, we eat delicious healthy food, we can enjoy an evening by the fire with family and friends, we read the latest books, watch the latest movies, and the children have more than enough toys and books and games.
Keep your money by cutting out the waste
You do not have to give up anything of value while you massively increase your savings rate.
I find it hard to remember what I was wasting all my money on before I started to pay attention.
However, if you’re looking for places you can make improvements to your spending, the following are good candidates (cut anything that doesn’t give you fulfillment in proportion to the hours of life energy spent):
- Anything bought using debt (including leasing)
- Anything you buy as a habit
- Any daily spending (work lunches, coffees, travel expenses)
- Any regular spending or direct debits
- Insurance you don’t need
- Subscriptions (cable, magazines, papers, gym, software)
- Entertainment (cinema, bars, restaurants, attractions)
- Expensive things (package holidays, furniture, clothes, watches)
- Outsourcing (cleaner, gardener, decorator, window cleaner, dog walker, nanny, cook, driver)
- Always buying the latest: phone / car / fashion / gadgets / etc.
- Buying too many: cars / houses / clothes / shoes / bags / watches / etc.
- Letting big purchases just get bigger and more expensive (houses, house improvements, cars, TVs, home cinema, yachts, helicopters, islands, etc.)
The biggest improvements
Make sure on the big purchases that you pay for only those features that actually enhance your life.
For example, pretty much any car can carry you and your family in air-conditioned comfort at an incredible 70 mph while you listen to your favorite music, podcast, or even learn a new language. But how much extra lasting happiness do you get by adding mood lighting or reversing cameras.
Look to buy second-hand to maximize what you’re getting for your money.
The biggest improvements come from cutting out the daily waste on things like travelling to work and how much you spend on lunch there, and from finding better options for the big purchases (maximum value, minimum spend).
Another improvement is to never go into a store (apart from for food). I still feel the urge to buy something when surrounded by shiny new things in a store. If you don’t go in, there is no temptation to buy.
When surrounded by the abundance at home I rarely feel the need to add anything else.
Another thing happened that I wasn’t expecting. The focus on my spending lead me to appreciate, enjoy, and use the things I had more.
Rather than constantly thinking about the next thing. I found myself feeling deep gratitude for all the things we already have.
Increase your financial strength
It’s an incredible feeling to bring your spending in line with what truly gives you fulfillment.
You’ll have a strong sense of integrity in the way you’re spending your money and living your life.
Since you’re only cutting out the waste, the things that don’t make you happy, your life will feel full of abundance.
Almost as a side effect of this focus on an efficient and abundant life you’ll find you have more and more money to save and invest towards your financial freedom.
Everything good gets to stay 🙂