“You all laugh at me because I’m different, I laugh at you because you’re all the same.” — John Davis
Financial advice abounds everywhere we look. It is not difficult to discover. And yet, the statistics paint an ugly picture that it may not be working so well. The average American family still holds $6,700 in credit card debt and 76% live paycheck-to-paycheck (just to name a few).
Unfortunately, most people think more money is the answer. And while there may be some truth to this solution, most of us would readily admit that our most basic needs (food, shelter, and clothing) are financially covered. It appears then that most of our financial troubles are not based in need, but in cultural expectations—that because we live in a society based almost entirely on consumption and the promotion of it, we have too subtly bought into the lies and built our lives upon them far more than we realize.
Perhaps, then, the pathway to financial freedom requires a bolder, more countercultural approach. One that intentionally begins to question the messages we believe and looks elsewhere for answers. To that end, consider this list of 8 Bold, Countercultural Decisions to Find Financial Freedom.
Each of them questions culturally-accepted norms. Before you begin, know that we believe and practice each item on this list. We have found wonderful freedom in them. And whenever appropriate, I’ll share the story of how we arrived at each decision.
Eight Countercultural Decisions to Find Financial Freedom
1. Purchase based on necessity, not possibility.
Especially in large purchases, consider necessity over possibility. When we bought our first home, we went to the local bank for pre-approval. They approved us for a loan up to $135,000. And… we immediately started looking at houses up to $135,000. We based our search entirely on possibility. There was no consideration given to our actual needs.
When we found a new, higher-paying job, we were pre-approved for a $300,000 loan and… we immediately started looking for homes in that range. Our purchase became a heavy burden in payments, maintenance, and upkeep. During that season of life, we discovered minimalism. Our desire for physical possessions changed dramatically. As a result, when we moved into a new home two years ago, we determined our ideal house based on necessity, not opportunity.
Our payments are smaller. Our upkeep is easier. Our lives are more freed to pursue other passions. We have never regretted the decision. And I actively encourage others at every opportunity to purchase based on need, not possibility.
2. Never carry a car payment.
One financial decision that has had a profound impact on our financial well-being was our wise decision to always pay cash for our vehicles. Subsequently, we have never had a car payment—ever.
I bought my first car from my parents with money I had earned working at a local carwash. And all future car purchases were based on the most reliable car (or mini-van) we could afford with cash already in the bank.
We have never owned a brand-new car or one that turned heads in traffic, but we’ve also never felt stress or regret over a car purchase. And if you ask me, that’s a pretty fair trade.
3. In dual-income households, don’t spend the lesser income.
One of the most valuable pieces of financial advice we ever received came early in our marriage when both my wife and I were working. My boss encouraged us to live entirely on my income and save every penny my wife earned. We did just that. Her earnings became our first down payment on a home.
But more importantly, it prevented lifestyle creep from setting in. And when our first child was born, becoming a one-income family was an easy transition.
4. Avoid alcohol.
Countercultural? For sure. Financially-beneficial? Absolutely. Even-possible? Definitely.
I inherited the lifestyle from my grandparents. Both sets refused the consumption of alcohol for different reasons (some personal, some religious). But regardless of their reasoning, the pattern continued with my parents, myself, and my siblings.
While financial concerns were never a chief motivator, the decision has resulted in significant, personal financial benefits for us. Americans spend $50 billion each year on alcohol—despite the fact that 34% of Americans don’t drink. This is a significant expense for many families. Removing it completely returns a significant amount of discretionary income.
And adding other unhealthy behaviors to this decision results in even greater returns.
5. Never retire.
I learned it from my grandfather. He worked full-time until 7 days before his funeral at the age of 99.5 years old. I learned from him the value of work and the importance of seeing work as contribution. This view of work changes everything.
Work is no longer something to avoid or retire out of as soon as possible. Instead, work becomes joy. Now, just to be clear, it is still wise to plan financially for the future and old age.
The truth remains that our physical bodies break down and some types of work become difficult (or impossible in some cases) to continue. I would never argue against the importance of transition in life or saving for it. But getting set in a mindset that only looks forward to retirement without the possibility of embracing work during it is one that should be adjusted. And ought to impact our financial decisions today.
6. Pay with cash.
Every study reports the same finding: We spend more when we pay with plastic than when we pay with cash. And one of the most commonly offered pieces of advice for those trying to stick within a budget is to pay with cash rather than credit. Yet the strategy remains rarely used.
While we have only used the strategy off and on over the years, we have found great personal benefit each time. Not only does it help us stay within a budget, but it also helps us keep a tighter record of where the money is going. And greater intentionality in tracking expenses is advantageous regardless of your income level.
7. Give away (at least) 10%.
There are numerous religious traditions that teach the importance of giving away 10% of income. Personally, it is a financial philosophy that we have put into practice during times of both little and plenty.
Certainly, the gifts benefit the receiver. But more than that, the gifts benefit the giver. Generosity is an important step towards contentment. It brings the fulfillment and joy and meaning to life that is often sought in financial purchases and personal gain. It reminds us of how much we already have and how much we have to offer others.
And while it seems entirely counter-intuitive, one of the most important steps we have taken to financial freedom is to embrace the practice of giving some away.
8. Put the spender in charge of family finances.
While this may or may not suit your family’s unique dynamics, it has been entirely helpful for mine. I hold a college degree in Banking and Finance and Accounting was one of my favorite classes in high school (seriously, thanks Mr. Fink). I understand budgets, spreadsheets, assets, and liabilities.
But my wife is a bigger spender than me. And one of the most helpful actions we took as a family was to put her in charge of the finances rather than me.
Because our bank account levels were always small, she became far more careful with her purchases… and worked hard to keep me in line too.
Again, I don’t offer this list as an exact prescription for each reader. Each and every family situation is entirely unique. What has worked for us may not work for you. But if financial freedom has eluded you, earning more money may not be the answer. It may require a bolder, more countercultural decision to getting out of debt..
Benjer McVeigh says
Isn’t it crazy how financial freedom is so counter-cultural? Our family is on the path to being debt-free, and it often strikes me how much effort it takes for me to say “no” to something that no one in our family actually needs.
Joelle says
Love that idea about buying for necessities and not possibilities. Just because we CAN have something doesn’t mean we should get it.
We bought a used car last year and had to borrow because we had NO cash after 1.5 years of unemployment. Even though it’s not a large loan, I hate having it. That’s extra cash that could go toward savings and other bills, so we’re trying to pay it off pronto. I don’t think I’ll ever let myself be in a situation where I need to borrow money for a car again.
beachmama says
Ahhhhh, number 8. Put the spender in charge of family finances. I wished this would work in our household. My husband is the bigger spender by leaps and bounds but he hates paperwork and paying bills and when he was doing his paperwork things were an even bigger mess. I’ve taken over and he loves it. The solution now is weekly financial meetings. They don’t need to be long, 15 minutes, but it keeps the spender aware of what the money is going. We’ve fallen out of the weekly habit so thanks for the ‘reminder’ Joshua!
Carl says
I’m not sure that I’d call all of those points counter-culture because I wouldn’t say that they go against the mainstream culture of the United States. I’m also not sure I agree with some of them but I just wanted to add a couple more points.
When abroad, it strikes me very quickly how foreign cultures differ from U.S. culture when it comes to finance. The biggest difference I see is a tendency for young people outside of the U.S. to live with their parents. From the time they graduate perhaps until they get married, they live at home. This is counter to U.S. culture because our culture celebrates independence and financial freedom. The problem with moving out of the parents’ house too young is that young people spend so much of their money on rent. Could they live at home for one, two, three or more years? Depends on the job they might have, but why not save up money for a few years before going out on your own?
The other point I’d make is avoid eating out but for special occasions or date nights. Even if you don’t live in a big city, the expense of dining out (including sales tax) is much higher than the expense of buying groceries and cooking your meals. Cooking is a fun hobby, nurtures creativity, and brings people together at home. It also allows you to tailor your diet. Even when you’re out at a restaurant and you think you’re eating healthy, there are all kinds of preservatives, oils, salt, and butter that make their way into the food.
MelD says
I’m not sure this is true and suggest that education attitudes could be to blame.
In Switzerland, only 10-20% of young people study at universities. The others do vocational apprenticeships for about 3 yrs so that by 18/19 they are capable of earning a full-time living and usually leave home. An atmosphere of financial responsibility dominates and these youngsters usually manage to afford a pleasant rental apartment, modern furnishings and a car, while saving to afford to travel or to finance further training/education/language courses – I have seen this over and over. Practical skills rule over academic ones!
Those who study, however, are in school till 19/20 (you need to pass high-level exams in 13 subjects to get into uni here), then university till 23/25 and once finished, still don’t really have work skills, so internships etc. till late 20s… that’s why so many young adults live at home in countries which promote further education over vocational education!!
Marya says
Very wise pieces of advice; personally I made two months trials for my spending; one month I just paid with “plastic” card and the second month was just cash payment for the routine purchases and it was a huge difference.
Very interesting quotation from John Davis. I googled it, there are lots of people named John Davis. Could you give more information about him. I really like his witty remark. Thanks.
Ree Klein says
Hi Joshua,
I really love your site. Transforming our relationship with money is a subject that gets me all charged up. You bring up some really great points. I agree with another reader that you were fortunate to have a boss who mentored you. But, great mentoring usually falls on deaf ears so the really great thing is that you took it in and DID SOMETHING WITH IT!
My step mother has said that couples should live on the wages earned by the man. One, because it forces the couple to save and also because it makes the man feel, well, like a man. I never did this but it seems like a very good idea.
Amanda says
Great tips! I especially like the last one. I am the spender in our family, and I have been in charge of our finances for over a year now. It has made a huge difference in my spending habits and helped my relationship with my husband as well. Although, I have to say I just can’t swing tip #4. Alcohol is a hobby for us more than a habit, and one that we enjoy quite a bit. I’m sure we’d save a lot of money if we didn’t drink, but then we would miss out on some of the experiences we enjoy as well (like brewing our own beer or wine dinner with food parings, etc.)
Catherine says
I think minimalism is about focusing on what brings you joy. Wine is a passion and a hobby for us too. Worthy of a line item in the budget :)
Standa says
Great post, interesting and original tips! Thanks, Joshua!
James Petzke says
It always shocks me how people don’t see the simple truths in financial statements like these. It really isn’t hard to build wealth these days if you simply forgo buying needless crap and invest your money wisely.
Laura says
Good article – motivating. We’re doing well on some points, and failing miserably on others. We are carrying some credit card debt, a hefty car payment, and I am a work-at-home wife (seamstress/homemaker) who only gets occasional jobs nowadays. My husband, 58, wants to retire next year, and it scares the bejeebers out of me. Because I don’t bring in a steady income, I don’t feel at liberty to discuss what I feel is a too-early retirement with him. He has worked hard to provide a good life for us, and wants to get out of the job he’s had for 36 years. I can’t blame him. His idea is that we will get into flipping houses together, as we have extensive experience renovating our own homes. I will be 60 this year, and am what you would call, “not spry”, to put it mildly. We want to sell our too-large family home, that has a lot of unused space now that our three kids are grown & moved out, and have been waiting for the housing market to pick back up before we sell. Your house sounds ideal. I’ll be sharing your article with my husband – thanks!