One percent? One percent of what? How can one percent possibly make a difference?
What we’re talking about is the simplest way to start getting a handle on your finances when you feel like everything is impossible. Hopeless! It’s hopeless!
It’s not hopeless.
The way I started running in my thirties was that I visualized adding one sidewalk square per day. I was sure that no matter how tired I felt, I could always make myself trudge along another couple of feet. One sidewalk square was a measurement I could visualize and understand. It worked; I never realized on that first day that I’d wind up running a marathon four years later. In fact, if I’d thought of that kind of distance, I would have quit before I began, because it just sounded like too much.
That’s why we’re starting with one percent, because it’s small. That’s one penny out of a dollar. A dime out of ten dollars.
Little by little, though, it adds up. Also, it teaches us to think of large amounts in small, manageable chunks.
When my husband and I first met, we bonded over our finances. I was fresh out of college, and my student loans literally got bigger every time I made a payment. He had only been divorced for a year, and he wasn’t very far into the alimony and child support process. We were both broke. We also both enjoyed talking about the intricacies of finance.
That’s why it surprised me so much when he shared that he wasn’t contributing to his retirement.
“WHAAAAAAT?!?” I squawked.
He vented a bit about the alimony, child support, basically paying for two households.
I wasn’t about to hear it. I reminded him that I earned barely over a quarter what he did, but I was maxing out my retirement contributions. After paying my rent, student loan, and car payment, I barely had enough left for groceries. “You can’t even save one percent? I don’t buy it.”
He retorted that I had “small money problems” while he had “big money problems.”
Later, he confessed that he’d thought about what I said, and he went into HR and filled out the forms to start saving toward his retirement again.
I feel pretty smart about this now, considering that we eventually got married! We weren’t even dating at that time, but the tens of thousands of extra dollars he saved because of my rude lecture are now growing nicely. That conversation is also part of why we got married. Frugality that comes naturally to me is highly attractive to my spouse as well.
At that time in my life, I picked up coins in the street (still do) and I would deposit them into my checking account along with my paycheck every week. Maybe thirteen cents here and forty cents there. This paid off several months later, when I got hired permanently and had to wait three weeks between checks. I overdrew my account by eleven cents, and because of my habit of going into the bank in person every week, I talked my favorite teller into waiving a $22 overdraft fee. If that overdraft were a few dollars more, maybe that negotiation wouldn’t have gone in my favor. Too bad I didn’t find an extra quarter one day.
I kept a spreadsheet in those days. It was the only thing that helped me feel like I had any control over my situation. I would have roughly thirty dollars left at the end of the MONTH. I was using credit cards just to buy food, and just as I’d pay off the balance on one card, I’d run it up on the other. The best I felt that I could do was to get the total balance a few dollars lower every month. I set my sights on getting hired permanently from my temp assignment, on promotions and raises.
In the meantime, I made a little here and there. I sold a few things on eBay, my roommate and I had a yard sale, I joined her when she got a table at the flea market. I cleaned houses and babysat just like I always had. I beat down those credit cards little by little.
I didn’t buy things. When I say that I didn’t buy things, I mean that I didn’t buy things! I wore the same outfits over and over and over again. I had two casual sweaters to wear on winter weekends. They drove me crazy, and I felt like burning them in the parking lot by the time I could finally afford to replace them. I went to the public library and brought home books and DVDs. Sometimes I just went to bed early. I worked overtime, sometimes clocking in early and staying late on the same day because it was that kind of job.
The thing about starting with one percent is that it forces you to get out a calculator if you want to do it right. You have to start getting more specific about real quantities and real dollar amounts. It’s just a way of being honest with yourself and the world. It’s a way of making sure you don’t make any commitments you can’t keep. It’s a way of protecting Future You from having a worse situation than you do today. At least when you’re treading water, you’re not going under.
Starting with one percent means you’ve made a decision. It means you’re going to get more serious about your finances. It means you’re going to pay attention to your income and your expenses. It means you’re willing to adjust how you spend your time and energy to free up more cash flow toward your savings and debt repayment. It means you’re not allowing any more blind spots in your behavior.
Starting with one percent is a start. Maybe it’s only one penny out of every dollar. That’s okay. It’s also one dollar out of every hundred! When you’re used to it, you can stretch a little and make that one percent into two percent. That sense of manageable amounts is what you can use to go as far as you like.
I was on the Future Phone just now, talking to Future Me. We want to get some clarity on how we should be allocating our time. Future Self informs me that it’s solid common sense to assume we’re going to live a long life, and plan accordingly.
Let’s spend a minute going over the gamble here. Where are the risks? Future Self’s Wager is like Pascal’s Wager, except not religious. There are two bets.
One, you assume you’ll die at X age and you actually die sooner. Two, you assume you’ll die at X age and you live longer.
If you die sooner than you expected, you potentially miss out on opportunities and leave things unsaid.
If you live longer than you expected, on the other hand, things get complicated. You run out of money. You don’t carry the appropriate long-term disability insurance or long-term care insurance. Your house, appliances, and vehicle start to depreciate, and you can’t afford to repair or replace them. Inflation comes for your assets. The last sixty years of your exercise and nutrition habits catch up with you. You live out the effects of all your strained and broken relationships. You feel the pangs of regret for all the opportunities you never pursued, all the things you never learned, all the places you never went, all the apologies you never made, and the legacy you never created. You realize that you always had plenty of time for everything you ever wanted to do, yet you squandered it.
To me, it’s quite obvious that assuming you’ll die sooner is a much worse gamble than assuming you’ll live longer. If you’re wrong and you DO live much longer, you won’t have the relationships, the mindset, the physical stamina, the skills, or the material assets that you’ll need.
Also, we might be talking a very, very long amount of time. Say you assume you’re going to be gone by, um, sixty-seven? But you actually live to be eighty-six. That’s NINETEEN YEARS of “Oops, I never thought this would happen.” What if you then live even longer than that? What if you live past the point when YOUR KIDS are eighty-six?
Most people will instinctively reject this idea. Seriously, though! The average lifespan has roughly DOUBLED in the last century. Advances in sanitation, epidemiology, nutrition, surgery, pharmaceuticals, gerontology, and just general medical knowledge are going to continue to accelerate. Financial planners are telling people to plan to live to be ninety-six right now, just to be on the safe side.
Again, the risk of planning to be ninety-six and then dying sooner is that you have enough resources, and you wind up not needing them after all. You can then leave it all to your kids, your mate, your capybara, and/or your favorite charity.
You think it’s pessimistic to assume you’ll die young. Think again. It’s much more pessimistic to assume you’ll outlive your money, your health, and your relationships by thirty years or more.
It’s basically fortune cookie wisdom to ask, “What would you do if you found out you’d die tomorrow?” Or six months from now, or a year from now? I’ve found it much more interesting to ask, “What would you do if you knew you’d live past one hundred?”
The other day, I was taking a class in situational combatives, part of my martial arts training. It occurred to me that if fortune favors me, I could train hard for another twenty-five years. That would put me at age sixty-eight. My partner in that class happened to be seventy-eight and he’s still going strong, so it’s not an unreasonable gamble. What could I do in twenty-five years? I could be a sixth-degree black belt, that’s what!
That gave me pause. I could probably attain a black belt in a shorter span than that, maybe even less than half that time. Wait. Waiiiit a minute. What ELSE could I do in twenty-five active years besides getting a black belt in a martial art?
Get several black belts?
Suddenly it felt as though I had such a long time to fill, so many long decades that could instead be filled with boredom and dissatisfaction. I’d look back on my young, dumb forty-three-year-old self and wonder why I hadn’t made better use of my time.
Past Me! Why u so lazy??
Not only physical pursuits, but other kinds of disciplines caught my attention. What could I study in twenty-five years? Music? Painting? Small engine repair? Esperanto?
One of the benefits of middle age is that you start to understand how to shape longer-term goals and projects. Another is that you have the time and resources to pursue them. Among the best is that you have the patience and self-discipline you never could find as a teenager or young adult. You have to start to wonder how much your focus and dedication could improve, given decades of additional practice.
Already I’ve done something. I’ve put this thought out there in the world. What if we have more time than we think? Much, much more time? What scale of project would you consider if you knew you had thirty years to work on it? Now, if I’ve gambled poorly and I’m wrong about Future Self’s wager, I’ll still have done something worthwhile. If I’ve gambled well, only time will tell what sort of amazing things I might still have in me.
“20% off” is something most of us only encounter in the form of a sale sign or a coupon, am I right? We don’t think of it in terms of our income for a variety of reasons. One of these is that there’s usually a disconnect between what we earn and what we spend, because we don’t usually think of “things we are doing” as “spending.” Another reason we don’t think of our cash flow in percentages is that most people just don’t think that way. I know, because I’m not a numbers person. I’m not a numbers person in the same way that I’m not a maps person. That’s okay, because what we’re going to do right now is to tell stories and talk about broad concepts. I promise, few numbers involved.
This is basically how it works. Money flows into and out of our lives. We worry about it more when we have more bills than we do money, and less when we feel like we can relax a little. Few of us were really taught about personal finance, and even if we were, our friends, family, neighbors, and colleagues are unlikely to compare notes with us. The only way we can really tell how we’re doing is by instinct and guesswork. Even married couples may not share finances, only discussing it at tax time and only when we can’t avoid it.
How many of these things are true for you?
Thinking of how much you earn in terms of your hourly rate
Thinking of how much you earn in terms of your annual (gross) salary
Thinking of how much you earn in terms of your take-home pay, paycheck by paycheck
Not having thought about it for a while
Honestly, none of this ever occurred to me when I first started drawing a paycheck. I thought of what I earned by the hour, and I had no sense of how much I actually took home in a month or a year. I knew how much my rent was, but it also never occurred to me to estimate how much I spent in a month on everything all together. I just did the best I could, one paycheck at a time. Life was hard, sometimes harder, sometimes even harder than that. Work hard, I thought, just keep working hard and things will get better.
Things did get better eventually, but not because I worked harder. In fact I doubt I’ve ever worked as hard as I did in the days when I was flat broke. What changed was just that I understood more.
I thought I would eventually get promoted if I just worked hard enough. Instead, it turned out it was completely up to me to choose a very specific career path, sign up for loans and earn an advanced education, and market and promote myself. None of the employers for whom I worked in the first decade of my career ever would have had a place for me. If I’d stayed, it never would have mattered how hard I worked, it would have gotten me nowhere.
I was proud of myself for not having a credit card. I didn’t realize how complicated it would be to have no credit history later on.
I took on bottom-dollar side hustles, not understanding that I would have been better off using that time to figure out how to earn more money for less effort. What I was doing was offering lower-value services, which effectually cheats people of my best contribution. Do what only you can do, not what almost anyone can do.
Okay, so the first reason you aren’t saving 20% of your income is that you probably don’t know exactly how much you earn or how much you spend. Cash flow is a metaphor in your life, not a highly specific quantity.
The second reason you aren’t saving 20% of your income is that you’re barely making it. You feel stuck and you don’t know what to do next to maximize your income.
The third reason you aren’t saving 20% of your income is that, if you have a partner (spouse, romantic partner, roommate, kid), you aren’t discussing money. Not if you can avoid it! Bringing up the topic is a source of stress, not power. You’ve probably already fought about it, and in fact maybe you fight about it every single day. Nothing productive is going to come out of this state of affairs.
Let me put it out there that for most people, what’s needed is a paradigm shift, or a completely different way of looking at the problem.
(Money isn’t a problem! Instead it’s a solution for nearly every problem that modern people face).
(For most of human history, your problems would have been stuff like siege warfare, plague, top-tier predator attacks, famine, and the million bajillion things that hadn’t been invented yet).
It’s like this. If you make a certain amount of money and you spend all of it, you’re saving zero. If you make a certain amount of money and you also put a certain amount on credit cards, you’re spending more than you earn. You have your reasons, yes, and unfortunately banks and creditors don’t care about those. Future You is the one who’s going to have to deal with it, and Future You is NOT going to thank Today You for passing it on.
If you spend 20% more than you earn, you can’t just save 20%. That only gets you back to saving zero. (This is the numbers part, but hang on, it’ll be over quickly). You have to do 40%. Right? And a little more than that to take care of the interest charges, fines, fees, and every other way the banks like to pull things out of your wallet.
This is why you aren’t saving 20%. Because if you’re like most Americans, you can’t even save zero. You’re going under a little bit more each month, and the process is so gradual that you don’t even feel it happen.
It doesn’t have to be like this! This isn’t a cause for being scared or angry or hopeless or defeatist. It should be more like the day I accidentally pumped liquid hand soap onto my toothbrush and noticed right before I put it in my mouth. Wait! Toothpaste isn’t pink! As long as we’re paying attention and we’re aware of what we’re doing, there’s always time to make a change. We can figure it out.
Step one: Make it as fun and relaxing as possible to hang out at home, with your friends, at the park, at the public library, at the beach, or anywhere else that doesn’t cost money. Nap, read, have long conversations, draw, stretch, listen to music, make art, learn to cook, and remind yourself that contentment is free.
Step two: Tell someone. Our culture is super-freaky-weird in that we’ll be totally open and honest about, say, ingrown hairs, or embarrassing first dates, or our sexuality, but not about money. Wouldn’t money seem to be the least intimate and least personal of these things? It’s just numbers, after all. But no. It IS weird. That’s why it’s an act of real bravery and courage to tell the truth about your financial anxieties and confusions. Guaranteed, you’ll find someone else who feels the exact same way you do. Maybe you can work together to learn more, or at least work together to hang out and not spend money together a lot.
Step three: Think of some ways you could radically restructure the way you live, at least temporarily. As an example, my husband and I sold our car and moved into a studio apartment, at least for a year. We’re saving 40% of our income, and working on increasing that number. It isn’t all that bad because we’re usually working anyway, because it helps us feel like a team, because we got rid of most of our stuff, because it makes a good story, because the apartment has a pool and a hot tub, and because eventually we know we can move into a bigger place again. If we want to. More money, in our society at least, means more options. More choices, more freedom.
If you’re curious and the spirit moves you, maybe you could get a sheet of paper or set up a spreadsheet. Maybe you could work out your net income and your average monthly expenses. Maybe you could make a list of how much you owe on all your cards, car loan, student loan, personal loans, or anything else. Maybe you could look at that number and just... feel it for a minute. Feel that you are part of a world of infinite choices and possibilities, and that a year from now, everything about that number could look and feel completely different.
It’s just a number, after all.
We didn’t spend our anniversary together this year. How could we, when my husband was off on a business trip? It’s hardly the first time this kind of thing has happened: he’s been sent on travel on our anniversary, on his birthday, on Valentine’s Day, and he was even in China on my birthday one year. That’s okay. At our stage of life, we fit in marriage where we can. We’ve been together long enough that we’re clear on our priorities and how we fit together.
There’s a bit of a lie in the previous paragraph. True, we weren’t together on the date of our anniversary, and it’s also true that we barely saw each other the last half of the month. First I was out of town, then he left a few hours after I got home, and there hasn’t been a 24-hour period where we were both at home together for two weeks. We did, though, take off for a two-day weekend in Las Vegas - before he had to leave again the day after we got back.
Why Vegas? That’s the first place we went on our first trip together, and we’ve gone back every year, either for our anniversary or his birthday or something. We know our way around. We have favorite restaurants and shops. There are memories behind practically every doorway. The rest of our vacations are all about adventure, but Vegas is where we go to relax and play. We remember ourselves as a newly dating couple, as newlyweds, at all the milestones of our time together.
We celebrate that we still enjoy each other’s company. We celebrate that we still have chemistry together, that we’re at least as physically attracted to each other as we were when we started dating, and possibly more so. We celebrate that we agree on how to save and spend money. We celebrate that we can plan and carry out trips that we both anticipate.
After nine years, we’ve learned to appreciate more and more how rare it is for a middle-aged married couple to continue to have fun together.
We don’t fight - we make policies. For instance, I made us late for dinner reservations because I took too long to get ready. (Step 1: Be the first to take ownership when you are at fault). Then we reframed it. Policy: When we go out for a special occasion, I need an extra 15 minutes for hair and makeup.
We divide the labor. I’m in charge of researching restaurants (because of my fringe diet) and choosing shows (because let’s face it, I’m the best). He’s in charge of choosing our seats because 1. He cares more and 2. He has an easier time reading the seating chart.
We pack light. We’re both one-bag travelers. We help each other pick items for our respective capsule wardrobes. We backpack together. On Vegas trips, we check an empty suitcase, because this is where we do the majority of our clothes shopping for the year. Also, we both believe in the possibility of carrying an empty suitcase without encroaching on it.
We help each other put on our sunblock. That’s an especially big deal since his squamous cell carcinoma! I guarantee that nobody else would be as careful in applying *my* sunblock as *he* is.
We budget. OUCH, right? Not really. We save 40% of our income, and that’s after factoring in our vacation splurges. We’d simply rather live in a dinky, no-frills studio apartment on 20% of our income, and go on the occasional lavish vacation, than the alternative of paying double on rent, being in debt all year, and having to pinch pennies.
I have this thing about the hedonic treadmill. That’s what they call it when you adjust to a lifestyle upgrade, it becomes your new normal, and then you don’t even find it fun anymore. It’s really important to me not to become jaded or to expect luxuries as my baseline. I want to make sure I ENJOY THE HECK OUT OF my splurges. I’m pretty sure I can remember almost every dish of our fanciest meals, even years later, and that’s because we only indulge like that two or three times a year.
Frankly, this is part of why I’m married. Once I asked my husband why he married me, expecting that he would choose my sense of humor or my sweet nature. “Your frugality,” he said. Respecting your partner’s financial efforts, concerns, and priorities is the bedrock of marriage, unless you’re so rich you literally don’t have to care, which, that isn’t us or 95% of the world probably. Showing you don’t care about your spouse’s money worries is a fundamental rejection of what matters to them. Would you feel the same way about their health, their family relationships, their dreams, or their friendships?
That’s the other thing. We care about each other’s personal life, and we believe that we’re each entitled to one. We’re entitled to visit our families by ourselves. We’re entitled to have our own private friendships. We’re entitled to travel alone. We’re entitled to our own work projects and side hustles. We’re entitled to equal physical space in our home for our personal interests. We’re equally entitled to make requests about how we spend our time and resources as a couple. We support each other, because we each want the other to have the maximally fulfilling, fascinating life.
This is why it doesn’t bother me that I’ll spend my wedding anniversary alone. Our wedding day wasn’t our marriage, and neither is our anniversary. We’ll spend the day doing all of the things we’ve agreed on. He’ll give his utmost to this, his favorite and most interesting job of his career. I’ll bust my rump at the gym with my gym friends and work on my public speaking challenge. We’ll be faithful to each other and our budget. We’ll send texts back and forth throughout the day and discuss pictures of our pets. We’ll plan our next vacation and our next project together. We’ll try to decide what we want to do on our next milestone, our tenth wedding anniversary.
Better get it in the calendar now, or otherwise, who knows what we’ll both be doing?
One way to define the word ‘organize’ is in the radical, political sense. It can help to keep this in mind while contemplating Getting Organized in the women’s magazine, top-down, social trend manner. The point of Getting Organized is to focus your energy, clear your mind, and introduce enough structure in your life that you actually do everything you intend to do. Harnessing your rebellious streak is one way to take ownership of this process. Remind yourself that power is not given, it’s taken. Agency and initiative are yours to command, but nobody is going to hand them to you.
Here are some orders against which you can rebel.
GO TO BED EARLIER. If you’re tired and burned out, if you never feel like you have anything other than low energy, then getting better quality sleep is mandatory. However! Sleep procrastinators are staying up late to try to gain more personal time and assert some autonomy. If you do insist on staying up late, why not use that time toward Getting Organized? Late at night, you can still make a strategic plan, write a comprehensive to-do list, clear your inbox, shut off notifications, hunt for a better job, update your resume, study for an advanced degree, write a book, delete and cull and sort and file. You can even aggressively clean your house if you have some resentments and anger to direct at your partner, housemates, kids, or neighbors.
GET RID OF STUFF. It probably would make your life easier to edit your possessions. A lot of people, though, are using their piles of stuff to set physical boundaries when they aren’t sure how to negotiate emotional or social boundaries. Taking up space in a psychological sense, in a way that makes a huge and measurable impact on the world, would probably take more ACTION and less stuff-stroking. Until that point, why not hang on to the objects that you own and instead journal, meditate, or do some deep inner work on your emotional reality?
EXERCISE. I always associated society’s demands that I sit still, keep my frilly clothing immaculately clean, and passively maintain a sweat-free ladylike demeanor as Victorian social control. Girls of my generation were barred from participating in sports and strongly discouraged from being physically active or getting dirty. As an adult, I choose to do mud runs and obstacle courses, put on boxing gloves, and train in martial arts because **** YOU I DO WHAT I WANT. Sitting, though, is a time-honored tradition of political resistance and civil disobedience. Maybe the time I spend kicking and punching things, you instead spend mobilizing a campaign. *shrug* Working out can be a great way to release stress and tension, but maybe you need to retain that tension to fuel your cause?
SAVE MONEY. There are only a couple of things more empowering than financial independence, and knowing where your money is going can be a great source of clarity and resolve. This can be approached in other, bolder ways. It’s a common entrepreneurial strategy to “burn your ships” and know that you will have to push yourself hard to earn enough to reach your stretch goal in a short time period. I talked to a client after we spent three weeks sorting through piles of unpaid bills, collections notices, speeding tickets, overdue rent, and back taxes. She asked how much she owed, and I didn’t want to tell her, but I did, because knowledge is power and the truth will set you free. “Ten thousand dollars, is that all?” She basically marched out and landed a better job, feeling that it was easier and less stressful to “just earn ten thousand dollars” than to painstakingly negotiate repayment plans or follow a meticulous budget. Go big and go home.
EAT BETTER. Most people seem to experience keeping a food log or watching what they eat in any way as a soul-destroying prison. I found it fascinating and terrifically empowering, as I was finally able to assess the root cause of my migraines and night terrors. I weigh in every day because I’m working to put on fifteen pounds of muscle in a year, and how else will I know if I’m gaining enough? As a backpacker, marathon runner, boxer, and all-around endurance athlete, if I don’t make sure I get enough calories and micronutrients, I’m going to bonk. Ingredients lists, nutritional information, food logs, scales, measuring tape, and body fat monitors are tools for massive strength, power, and a BACK OFF, BUDDY attitude from the eighteenth dimension. If you want them to be, they are.
LIVE YOUR BEST LIFE. Honestly, if you’re an observer of pop culture, you’ll see that living your worst life and being your worst self is likely a quicker path to fame. It’s an undeniable way to differentiate your brand. Who wants the pressure of living your best life? Sounds like a lot of work. I think it might be more interesting and productive to define your most mediocre life and try to nail that first.
Ultimately, if you’re not the boss of you, then nobody is, and that’s something unique and particular in its own way. Wild tangle of brambles, you do you. Rebellion can be intriguing, it can set your world on edge like nothing else, and is it burning your flame in the most gorgeous way possible? A flame with a constraint can send a rocket into space. Where is your rebellion taking you?
I don’t drink coffee, but I am sitting in a legendary coffeehouse wasting time and money. At least that’s what they’d have you think. Of course it’s nonsense to think that a $5 daily habit can make or break whether someone buys a house or funds a retirement portfolio. Easy to say, when someone making six figures wants to chastise someone living on a third of that. Easy to say, coming from someone with a predictable schedule, benefits, paid holidays and sick time, who wants to lecture someone with none of those perquisites. Let me set down my steaming cup of tea long enough to share my thoughts on that whole latte budget thing.
I don’t own a house. It’s not because I can’t, but because for a lot of people in a lot of cities, home ownership is a very poor, even nonsensical use of money. Whether we spend a bunch of money in coffee shops is a moot point. There is no one-size-fits-all financial advice, and that applies to real estate more than to most investments.
Nah. If we’re going to talk about lattes or beverage equivalent, we should be comparing that to other options that represent roughly the same cash flow. So, if I’m spending maybe $25-30 a week at Starbase, what else could I get with the same money, and would it be more or less valuable to me?
$25 a week is ROUGHLY $100 a month, and that’s roughly $1200 a year. That’s about enough to buy a round-trip plane ticket to almost anywhere in the world. Therefore, if you have the vacation time and the ability and desire to travel, it could be said that you’re weighing a latte habit against an international plane ticket.
This is complicated by externalities, such as the fact that you’d also need lodging, ground transport, food, money for museum admissions and tours, an emergency savings cushion, travel insurance, and anything else that makes the difference between a ‘trip’ and a ‘vacation.’ You’re also factoring in expenses at home, such as pet boarding or childcare. Are you bringing someone else? Then this extra person would also need to trade off a $25/week habit for a year in order to come with you.
Maybe this latte IS my vacation. 30 minutes per beverage, five days a week, is a lot of mini-breaks.
I should state for the record that my husband and I save 40% of our income. We’re maxing out our retirement contributions. Because we pay ourselves first, and because we save so much money on our largest expense categories, we feel perfectly justified in wasting our disposable income however we see fit. If we’re gonna spend it on tea, we’re gonna spend it on tea.
We choose to live in a studio apartment, paying about 20% of our income toward rent, because we like the location. We’re minimalists, so we can fit. We’re strategically using the time to get a year ahead on our retirement plan. We also decided to quit owning a car. We don’t drink alcohol, we don’t pay for cable, and we can’t shop recreationally because there’s nowhere to put anything. We don’t really spend money in the ways that most people do. The way we live is radical, but it works for us. At this point we’re used to it.
We DO spend a lot of money on travel, our pets, my gym, the movie theater, and our cafe habit. When we go to the local Starbase, all we have to do is set down our Thermos cups. Everyone knows us by name, and they even know that the chai goes in the blue cup and the green tea goes in the orange cup. It’s a foolish indulgence, but a pleasurable one, unlike commuting in a car and making the associated payments.
That’s what this whole latte budget thing is all about. Leisure and pleasure! We’re *supposed* to be putting our noses to the grindstone, working long hours, stressing ourselves out, denying ourselves sleep, and demonstrating our 24/7 dedication to being Productive Economic Units around the clock. The way we actually live, it’s... it’s cheating!
We’re not supposed to live in an apartment cheaper than we can afford. What would happen to the economy if everyone did??
We’re not supposed to be debt-free. That means we have no shackles to saw off, and that’s almost like we’re economic free agents. Oh dear, that sounds like trouble.
We’re not supposed to have F.U. money. THAT would put us in the position of being able to turn down sub-optimal job offers or negotiate for a better compensation package, and, what??
We’re not supposed to be uninterested in passive entertainment or recreational eating and shopping. That makes us basically immune to advertisements or social comparison, which strongly implies that we’ll still be free birds ten years from now. Where is our hook?
We’re certainly not supposed to sleep 8 hours a night, hang out in the hot tub, take naps, or lounge around the coffee shop. Where is our appropriate sense of urgency?
The funny thing about all of this is that my husband and I do both work long hours. He’s just submitted the paperwork for his second patent this year, and I’ve got my own stuff going on. We work because we’re interested in things, and because most of the other options are boring. We’re just not going to do it out of a sense of financial instability or existential dread. We happen to share the opinion that it’s better for employers and clients when we work out of passion and fascination, rather than obligation or anxiety.
There are a few things that are smarter than a latte budget, for those who are still in struggle. If the wiggle room can’t come from rent or transportation or utilities or entertainment, here are a few ideas:
Enough for cab fare or a ride share to a place of safety
Enough for a week’s groceries
Enough for the top-end cold medicine
Enough for a first aid kit and a fire extinguisher
Enough for an extra month’s rent
Enough for a moving van and 100 boxes
Enough to replace an appliance or a set of tires
Enough for a new mattress and bedding
Enough for an entire month’s expenses
A thousand dollars can make a huge difference in someone’s life, if it’s carefully nurtured and tended. What can make a bigger difference is a feeling of empowerment, confidence, and self-efficacy. I HAVE THE POWER. Earning more, changing careers, advancing one’s education, running a profitable side hustle, or starting a business can certainly create more additional income than someone could save in nickels and dimes. That whole latte budget thing could be an insignificant line item at a higher earning level. Maybe that life-changing resume or application or admissions essay or business plan happens over a happy cup of caffeine in an overpriced cafe near you. Cheers to you, and may your endeavors be successful.
Q: What has eighteen legs and four wheels?
A: My family, sharing a rental car on vacation.
Frugality can be taught. It’s a pleasure hanging out with other people who get this, because you can enjoy each other’s company without feeling like you’re going broke. Most people seem to feel that peer pressure only works one way, that there’s this thing called “keeping up with the Joneses” that leads directly to spending. The answer to this is leadership. If you’re feeling broke, step up and become the frugality leader of your group.
The simplest and easiest way to become a frugality leader is to invite people to a gathering with low or zero cost.
The slightly more complicated way is to just be honest and say that you’re worried about money these days, and THEN invite people to do something inexpensive and fun.
When I had my first apartment, I could barely keep a roof over my head, but I was one of the few people in my friends group who had my own place. People would call and invite themselves over all the time. We’d just hang out and talk. Sometimes we’d sit on the floor and play cards for hours while lip-syncing to the radio. In college, I started a weekend card party that expanded to as many as seventeen people and went on for hours.
The difference between those days and now is that we have access to more types of card games and our friends all have dining tables.
We like potlucks. A potluck is a big improvement over a restaurant in many ways.
One night long ago, a large group of friends met at a cafe. There were about fourteen of us. We hung out for two hours, and then the engineer among us got out his calculator and carefully worked through the wad of bills and pile of coins to make sure we got the tip right. It took nearly fifteen minutes of making sure everyone had put in enough. As we were leaving, one of our two waitresses chased after us and yelled at us for stiffing them on the tip! We were pretty darn sure that her colleague had snagged the whole amount for herself, but it was also possible that a random loser had stolen it. This kind of thing does not happen when you stay home and host the party at your own table.
My feeling on “going out” is that it’s better for the economy when we go to higher-end places less often, rather than cheaper places more often.
It’s also true that I can cook for twenty people at home for what I might have spent on dinner for two at a restaurant.
When my husband and I first got married, we’d have an open house once or twice a week. I’d make a giant vat of soup or a couple of pans of lasagna, and we’d have a big bowl of salad and a couple of loaves of French bread. Sometimes we’d have pie and ice cream, or a cake, or a big fruit salad or a watermelon. I’d make a cake if someone brought in straight A’s, and they got to choose the flavor. This wasn’t terribly expensive for us, and it was arguably more fun than going to the movie theater or hanging out in front of the TV. Offering a hot meal meant our friends could “afford” to spend time with us as often as they wanted.
Except that sometimes, they were low on gas money! We had a running list of chores if anyone wanted to come over and earn $20 now and then. Having broke young friends means you always have someone to hire as a house sitter.
There are other ways to be a frugality leader besides hosting a potluck. These days, we couldn’t really do that because we live in a tiny studio apartment. We can, though, demonstrate that we aren’t competing with anyone through conspicuous consumption. We don’t own a car and I’m not a recreational shopper. I don’t color my hair, get manicures, or wear a diamond ring. We socialize with people who share our sense of humor, and that’s pretty much the baseline requirement.
If anything, what’s conspicuous about us is that we choose to highlight our frugality. We’d like our younger friends to know what we didn’t at their age, which is how quickly someone can become financially independent given the knowledge and focus. We’d like friends of our own age bracket to know that it’s not a big deal to dial back, downsize, and find some peace of mind around the concept of impending retirement. “We save 40% of our income” explains a lot about our lifestyle. It can also be really instructive to find out who else is into frugality and what they know that we don’t.
These are some of the things we have done for fun with our fellow frugal friends:
Go to book signings
Movie night with homemade popcorn
Hiking at the bird sanctuary
Teaching someone to use shop tools, the sewing machine, or a stock pot
Honestly, my model of hospitality is my grandma, who said that her friends would often come over and find themselves napping on her couch. Another delightful image is some characters from Anne Lamott’s Crooked Little Heart, who came over just to read quietly together. Friendship is best when it’s about talking, laughing, and hanging out, not silently burying ourselves in debt and social comparison. Those who disagree will take themselves and their big-spender ways elsewhere, and the rest of us can get down to chillaxing.
Less: A Visual Guide to Minimalism is for those of us who are still bound to our stuff and not sure what to do with all the clutter. Rachel Aust’s stylish book reminds us of the point of minimalism, which is that everything really can be simple and streamlined. It really is possible to relax in a personal environment that is “done,” where nothing is missing and nothing is demanding attention. This is the next level beyond all of those organizing books. See it, imagine it, believe it. Photos of interiors like those in Less make it look possible.
Flow charts appear throughout the book, demonstrating how to make decisions about what to keep and what to eliminate. A couple of these made me grin, as I realized how they would look to my chronically disorganized clients. “Am I keeping this for sentimental reasons?” Um, not sure? Is it sentimental if it only brings up bad memories, but I still feel obligated to keep it? There’s a list of “25 Things You Can Trash Without Even Thinking.” It includes “old notebooks,” “unused craft supplies,” and “unfinished projects.” Wow! I mean, technically she is correct, and life will go on without these things, but my people are only going to be able to bring themselves to let go of these categories of their possessions under great strain. It’s a telling example of how we create our own problems and make our own lives more difficult.
My motivation for getting rid of my own old notebooks was that if they only existed in a single paper copy, then they were vulnerable to ruin or loss. I also couldn’t search them, and it was nearly impossible to track down information I needed. Now they’re digitized and backed up, and that makes them safe and useful. I “trashed” the old notebooks while keeping the important part, which was their informational content.
Aust does include some excellent thinking exercises on how to make decisions and emotional adjustments around letting things go. For instance, if this were stolen, would you actually replace it? Are you keeping it for its actual value in your life, or only its monetary value?
Stuff isn’t “worth” what we think it is. We fall for the “endowment effect,” meaning that we believe things are valuable because they belong to us, and it’s hard for us to realize that nobody on earth would pay the price we would demand for our old junk. How is it worth anything if it just sits there, literally gathering dust?
Minimalism isn’t practical for everyone, and Aust acknowledges that. She also points out that we can’t go minimizing other people’s possessions. From my work in this field, I can tell you that the person most likely to bring me in is usually the real hoarder in the home! This person is frustrated that other people are storing their stuff in areas they want to use for their own personal items. With all your stuff in the way, I can only bogart 90% of the common areas! We certainly both agree that minimalism starts with oneself and one’s own belongings.
There’s a 30-day minimalism challenge in Less that I really like. Most of my people would need to spend more than a day on some of these, but it’s still a great starting point. I’m particularly impressed that the challenge includes finance, information management, and meal planning. There’s even a social media cull, and therein we discover the time we need to carry out the rest of the challenge!
One of the major strengths of the book is the section on capsule wardrobes. Most Americans have a crazy amount of clothes, and this will be the area to see the fastest results. If you can’t figure out where to start, start here.
As for the interiors, Aust reminds us that we don’t need to keep things just because it’s “expected” if they aren’t useful to us. I’m living proof; I hate coffee tables, so we have an ottoman instead. My dresser has a footprint of only about two square feet, so it stays in the closet. “The Only 45 Items You Need in Your Home” may be a bit on the luxe side, because I don’t have a bedside table, a bath mat, or a washing machine, and I got rid of the iron and ironing board the last time we moved. I generally don’t keep any of the suggested pantry items on hand, either. The “20 Essential Cooking Tools” were right on target, though. There are very few kitchen items I use on a weekly basis that fall outside that grid.
Different styles of decor are included, indicating that not everyone has to go for the hard-edge version that appeals to me. What should be apparent is that stacks and piles of clutter never add anything positive to a room; we can add charm and warmth with color, music, and friends rather than STUFF.
As a tiny-house, debt-free person, I can state for the record that Rachel Aust’s approach works. Personally, I’m more minimalist than the book in several ways, but extremely maximalist in others. There’s still room for a parrot, a unicycle, and a set of hula hoops in a 612-square-foot studio apartment. I like the connections that Less makes between a structured, simple interior, an organized calendar and to-do list, minimal cleaning, financial freedom, and peace of mind. I’m going to set about having Less right away.
One of the many paradoxes of clutter is that it can be harder to let go of stuff we got for free than stuff we bought retail. Why is this? Free stuff can range from free samples to gifts to items picked up at the curb to website giveaways. It edges up to yard sale bargains, thrift store finds, and anything from the sales rack. A lot of us get swirly eyes when we see a FREE sign, and some of us would want to take the sign as well!
Every single thing we own has several types of costs. One, it takes up physical space. I’m hyper-aware of this because my husband and I share a 612-square-foot studio apartment with a dog and a mid-size parrot. If we bring home so much as an extra can of soup, it’s a storage issue. People tend not to think of how much their rent or mortgage costs per square foot, which can be a huge financial pitfall, because rent is usually our largest budget item by far. When we downsized from a one-bedroom to the studio, the amount we cut in rent was almost equivalent to what we were spending on a car. A new car!
How much is free stuff really worth, if by avoiding it you could have cut your rent by 20% or more?
Another underrated way that stuff costs money is when its owner pays for a storage unit. It is truly appalling how much my people spend on storage, when in every case, they genuinely can’t afford it. When I find out they’re putting it on a credit card every month, I want to cry. Someone I know has spent a full TEN THOUSAND DOLLARS maintaining a storage unit over the years. I know what’s in there because I helped pack. It’s just generic housewares, like an old couch and kitchen stuff, all of which could have been replaced for under a thousand dollars.
In fact, most people could probably replace a full set of household items by asking their friends and acquaintances. I’ve seen it happen at least a dozen times. Someone has to start over, and within a week they’ve got beds, a couch, a dining table, pots and pans, everything you could want. Granted, it might not all match, but then the original stuff probably didn’t, either! Think of the fun of watching all that FREE STUFF being carried in the door.
See how this works, though. Rather than put your stuff in storage indefinitely, spending hundreds or thousands of dollars to not use it and not look at it, you can give it away to someone who needs it. Then, when you’re ready to set up housekeeping again, you simply put out the call, and the loose free stuff of the world starts flowing in your direction again. Or, if that doesn’t feel magical enough, you can put what you would have spent on storage in the bank, and use the proceeds to buy new and improved versions.
The reason a lot of stuff is “free” is because it’s dated or obsolete. I’m thinking of a lot of stuff I’ve given away over the years, as we downsize our way to financial independence. The big red sectional couch that went to a mover, because it literally wouldn’t fit in our new living room. (It cost half what we paid for our current couch). The entire kitchen’s worth of pots, pans, dishes, and utensils we gave to a halfway house when we first got married. A carload of small appliances. Older phone models. After we upgrade, we tend not to care about the previous version, because we’ve extracted full value from it through daily use.
Say you buy something for $100 and use it for ten years. It then cost $10 per year. This type of value calculation can be done quickly on anything. If I buy a dress shirt for $50 and wear it 50 times, then it cost a dollar a wear. That’s about once a week for a year, or twice a month for two years. My wardrobe is small enough that that’s a good estimate. It’s why I’m willing to spend $50 on a single garment, because it’s cheaper that way than buying five $10 tops that fall apart in the wash, or even three $20 tops I don’t like as much and won’t wear as many times.
There are other reasons why free stuff isn’t free.
I’ve known people who have brought home a ‘free’ couch, mattress, or chair and found that their home was instantly infested with bedbugs or fleas. I’ve also known people who had a hard time getting rid of headlice or scabies. Hey, it happens. This type of thing is miserable, expensive, and incredibly frustrating and time-consuming to defeat.
Since we downsized into a tiny home, we don’t spend much time shopping or procuring things. We already know there’s nowhere to put it. If anything, we should be getting rid of two things for every one thing that comes in the door, because our space is a little crowded and chaotic with almost everything we own visible at all times. What we do spend time on happens to be ‘free stuff.’ Conversation, making art, hanging out with our friends and our pets, walking around the neighborhood, watching the sun set. Try to spend less time bargain hunting and more time simply being.
Today I set a new record for most consecutive days that I have been alive. That’s an old joke, but one that still feels funny. More interesting to me is that I can count how many days I’ve lived, but nobody knows how many days are still ahead of me. What’ll happen in the world? In my life? What kind of phone will Future Me have? Which of my favorite authors and musicians and filmmakers will put out new work? Will George R. R. Martin ever write that next Game of Thrones book? Future Me knows. Meanwhile, every day I’m Present Me. Present Self, living out whatever Past Self stuck me with, trying to make a better day for Future Self.
Since last year, I’ve done a bunch of stuff. I like to take the day to look at where my life is going, and whether it feels better or more fun or more interesting or more fulfilling. Have I made good use of my time on Earth?
I also do this process at the New Year, on my wedding anniversary, and on a smaller scale every quarter. Birthdays feel like a pretty significant milestone, at least to me. One day, maybe I’ll have my one-hundredth birthday, and if I do, I’d like to feel some sense of ceremony around it.
Since last year, I’ve moved to a smaller apartment, taken up martial arts and earned two orange belts, gained 15 pounds, promoted into a volunteer leadership position, and started riding my bicycle again. My husband filed his first patent, leading to some big stuff at work. My parents got a puppy for the first time in about forty years. These are all major changes.
Incremental changes have happened, too. We’ve made a bunch of new friends and acquaintances, and so has our dog. Due to our downsizing move, we’re financially better off. Our phones have better battery life. The addition of the extra muscle has happened gradually enough that new physical abilities seem to have magically appeared. I can open jars! My daily walking average has gone from 3.1 miles in 2015 to 5.2 miles in 2018.
A lot of stuff is the same as it ever was. Noelle just had her 20th hatch day and she still loves to shred paper everywhere and make a lot of beeping sounds. I still need more sleep. The blog continues to chug along.
Some stuff in our daily life is harder. Since we moved, we no longer have a washer or dryer, and all our meal prep has to happen in a single square foot. We’re continually unplugging and plugging things because of a shortage of power outlets. Our upstairs neighbors [*]. Someone down at the marina keeps setting off a propane cannon in the middle of the night. Life feels much busier.
From where we are right now, it’s hard to imagine where I will be on my next birthday. We’re planning to move when our lease is up, but where? Right now we’re living a combination of Best Location Ever and Worst Apartment Also. I intend to continue with martial arts, and that means moving into a physical reality I’ve never experienced. Looking around at the other women in my classes, women in higher belt levels, I see some astonishing speed, power, agility, and muscle definition. It’s somewhat alarming to think that this could be me one day, and all it takes is the schedule and the persistence. Continuing on my current plan, I ought to have nailed all the requirements for Distinguished Toastmaster. I should also have my student loan paid off, and all I can do is imagine what it will feel like to be debt-free and financially stable for the first time in my adult life.
So, what? This time next year: buff, debt-free, and living in a nicer place? Possible?
Looking forward three years, five years, and ten years, gosh. No idea. Talk about plot twists.
I celebrated turning 43 by finally getting my headstand, after working on it for two weeks. I plan to spend part of my day messing around and focusing on circus tricks. Depending on what kind of videos I find, I’ll either be trying to juggle, riding my unicycle, doing hula hoop tricks, or trying to turn a cartwheel. Then I’ll spend some time imagining what I want to learn to do before I turn 44.
How about you? What would you like to be doing before your next birthday?
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I've been working with chronic disorganization, squalor, and hoarding for over 20 years. I'm also a marathon runner who was diagnosed with fibromyalgia and thyroid disease 17 years ago.