“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..
Belajar Saham says
Tips no. 1 to Purchase based on necessity, not possibility is the main consideration before i buy anything
Eric says
Must read
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Brenda says
Absolutely! Excellent article! We have changed the way we look at Christmas this year because i just spent 3 years downsizing my home and possessions by over half and i don’t WANT anything physical as a gift (which culturally everyone expects to give and get in our family).
My daughter has been watching my progress and has started to come around to the idea of minimization herself. This movement is brilliant!!!
Robert Lyon says
I might add that how spend and consume shapes our governance and politics as well.
Edward says
The first point of your article reminds me of the concept “fulfillment curve”, described in the book Your Money or Your Life. Once you have fulfilled all your basic needs, there is only so much more you can spend before you hit a plateau in terms of lifestyle satisfaction.
Spending more beyond that point will only result in over-consumption, without increasing your happiness. The crucial point is the find the plateau and don’t spend beyond that!
Kannissa Vaihia says
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Liisa Jay says
thanks for the article, I agree with most of what was said here but you have to know yourself and understand your spending triggers.
I do use my credit card (I have two, I travel a lot and I have got stuck in a foreign country without a working credit care so now I have two), as stated above about most people not being able to control them selves, I must have very strong self control, I never overspend, it gets paid off each month, I never pay interest, plus I get points with the card.
Additionally, I do not use cash because I over spend with cash, if I know I have cash in my pocket I spend it but I think twice about pulling out my debit card or credit card, the bill at the end of the month scares me. This works for me, the cash in the jars or envelops do not.
I recently received a promotion, this past pay period was my first with a higher salary (first pay increase since 1999), the extra money is automatically being put on the mortgage to get that paid off faster which was on an accelerated payment plan already. The mortgage is my only debt! My car might not be the greatest, but its reliable and is paid for.
After splitting my pension with my ex, I estimate that I will never retire, thank goodness my job is fulfilling!
Joanne says
You should fund your IRA before putting it to the mortgage. When 59.5 you can withdraw without penalty and pay your mortgage if you still have one. Always pay yourself first…not your mortgage holder.
Girish says
My advice to frugal minded is … skimp on things (doodads) but do spend on experiences. Like travel, hike in mountains, spend on sports and necessary sports accessories, books, live performances, time with friends and family etc. Else you will regret at the end. Life is not worth living without good experiences. Earn enough, save a lot and then enjoy good experiences.
Mary says
Excellent advice! These things should be taught to children at school! I must thank an old colleague who I worked with at my first job in the ’70s and she told me to always save 10% or 15% (I can’t remember the exact amount) of our weekly wages and thats exactly what I did and it helped me set a path to follow. I was a young girl who liked shopping and enjoying life but I also divided my wages up in packets, some for bills, some for necessities of life and some for saving. I didnt get to spend on expensive fashionable brands, but had an eye for getting good quality clothes and accessories or any necessities during the bargain sales which would last for years and in fact they are well maintained and still in good condition!
NatesMom says
Why kids aren’t taught in school how to create and maintain sound finances for life will never cease to amaze me since it has far greater impact on their life than almost anything else. I’ll be 30 this year and have been working from 17. The jobs have paid decent, not great, but even with a 2-income household for most of that time, poor planning + poor choices + medical bills from our son’s month-long NICU stay in 2014 means we’re barely scraping by. We have and continue to modify our lifestyle to suit our means, but it will be a long road before we’re debt-free and stable. How exactly to get out of the hole we’ve dug ourselves into continues to be a quandary.
NatesMom says
I’ll also refrain from ranting about being part of the generation being hardest hit by the fallout from the disastrous economy policies of the last 30 years… ;)
Bob Anders says
Medical bills? lol who pays them? They hardly even count on your credit report anymore.