I majored both in Banking and Finance from the University of Nebraska. (I don’t talk much about it as my career took a different route shortly after graduation.)
And yet, despite having a college degree in money, I lived most of my life with financial discontent, always surviving paycheck-to-paycheck, despite several pay increases early in my marriage.
When more money came in, more money went out. My credit card statement seemed to often be simply a mirror of my paycheck.
As the cycle continued year after year, I found less opportunity to blame my financial stress on an entry-level income. Sure, money is tight when you’re just starting out. But at some point, the reality of my financial pinch had to be blamed on me—not employers, not rising housing costs, not previous generations, not failed political leadership.
I was solely responsible for my financial well-being. And clearly, my existing habits were not working. If I was ever to get ahead, something would need to change.
There are, of course, only two possible remedies for an unsustainable financial situation: 1) Either you make more money or 2) You spend less.
Most of us automatically assume the former is the key to improvement. If we could make more money, we’d get ahead financially. And while there is some truth hidden in that statement, I stand as proof that’s not always the case. Maybe you do too.
I would like to submit that the latter option is most often the easier to implement and longer-lasting in positive effect.
Spend less is the most important piece of financial advice you’ll ever receive.
Every financial advisor I have ever met begins with that advice as the foundation for freedom. It was the same thing my parents told me, and almost every person I looked up to in the financial world.
The most essential foundation for financial freedom is to spend less than you earn.
If you cut back on your spending, you’ll be able to pay off your debt, build an emergency fund, start saving for retirement, or find more space for generosity.
Why then is this step so hard to implement?
In a country where 76% of us live paycheck-to-paycheck and the average American between the ages of 18 and 65 has $4,717 of credit card debt, the message of “spend less” is clearly having a difficult time gaining traction.
One reason I believe spending less is such a difficult step for many to take is because the solution sounds unattractive to so many. Buying less sounds a lot like taking a step backwards in life. In a world where success is often defined in material acquisition, spending less sounds boring, unfashionable, and destined for ridicule.
And that’s what I used to think too—until I actually tried it.
Nine years ago, I made the intentional decision to own less and buy less. It has turned out to be among the best decisions I have ever made in my life. As a result of paring down most of my possessions and determining to only buy things that are actually needed (rather than everything I ever wanted), I have found my life improving in very significant ways.
Now that I own less and spend less, I have more time, energy, and money available to me than ever before. Because I own fewer things that need to be cared for, I spend less time cleaning, organizing, and managing. I have more opportunity than ever before to pursue my greatest passions in life—however I decide to define them.
Rather than running up a credit card bill by chasing every new product or fashion line sold at the department store, I am able to invest in the things that make my life worthwhile and significant.
In this simple decision to buy and spend less, financial discontent in my life has been resolved.
Spending less provides the foundation for financial freedom. It can also provide a pathway for a career change or escape from the unrelenting desire to earn more. Financial relief can even improve our marriages and our sleep.
There’s a reason ten out of ten financial advisors recommend it.
Of course, simply spending less may not be the solution to every financial problem that we encounter. But it is the solution to most.
If you are experiencing financial related stress, spending less is probably the most practical solution to resolve it. And the road to relief may in fact be more appealing than you think.
Love this post, it really spoke to me. I am in the same position as you was, blaming my income for the lack of financial freedom. I will definitely try to spend less and let you know how I get on !
What about when an opportunity comes along to expand my business? Where I would have to spend more to establish something new.
I so don’t want to spend the money but otherwise I can’t move forward. I am really stuck in the middle of two opposing desires.
Mary, I would offer that there’s a difference between spending money on ‘stuff’ that doesn’t add to one’s quality of life vs making an investment. Investing in your business – which from the tone of your post I’m assuming you love – is the very thing that, as a minimalist, you’d want to spend money on! As a former loan officer/financial counselor, my advice would be to invest in your business. That said, it might help you to have a clear plan worked out for what you hope to achieve with your investment in your business. That way you’ll know if your investment is paying off as you’d hoped. You’ll know if a course correction is needed. You’ll also know how long you expect it to be before your investment is paid back to you in full through additional profit. If you don’t spend more than you currently do now, it shouldn’t be too long before you are able to pay back your investment into savings. In addition, you might try investing only a little more than the absolute minimum needed to grow your business, i.e., 2 new outlets instead of 5. This specific advice may not apply to your situation, but investing in something you love is a wise use of money, IMO.
P.S. (If you don’t love your business, why even consider putting any more money into it?)
Personal opinion, but I believe there is a distinction between consumer spending and business investing. I don’t own a business, so I invest in the market. If I did own a business, I would invest in its growth. Mary, best of luck in the growth of your business.
Lived by this rule most of my adult life and it is freeing now worrying about owning stuff just to own it or because you want it. Being able to retire comfortably because I really don’t need to change my lifestyle.
Good tip and follow-up.
Love this – so simple yet powerful – will start asking this question before every purchase 🙌🙌
Your article is spot on. We accumulate things over the years resulting in ownership of thousands upon thousands of items. Each of the items may have cost us a mere few dollars. However, if we do the math the true cost represents a lot of money for each of us. On any given day we may only use a very small number of our possessions. Meanwhile our debt load increases sometimes drastically. Along with the associated financial stress. Freedom from this cycle of consumerism comes from buying and owning less.
This is a fantastic concept but does not help me when a person doesn’t make enough to even meet debt payments. Minimizing food bills, electricity etc is where I am at and still can’t pay my debt. I took a major pay cut to help others in need and also simplify my life but the debt is still there and accumulating due to lack of payments made.
I was in the same boat. Now I help others get back on their feet and back in control. I offer free session for you just email me. Last year I downsized or rightsized my house and this year it’s my personal life. [email protected]
Best wishes. Loved the article!
I fully agree with your article, thank you. Spending and owning less is a process that takes time and requires a different mindset. I have done shopping bans and made a spending budget which have been helpful. Which further advice would you give to take action to spend less and to seperate needs vs. wants?
Check out the Frugalwoods blog, they have many great articles to help you figure out wants from needs
Great blog! Thanks for the recommendation.
I so enjoyed your comment, it was rather lengthy but I read the whole thing. I am a firm believer / follower of Dave Ramsey, believe it or not there are still people in the United States who have never heard of him. But you are on the same track as he is and maybe that’s why I like your comments so well. We took Dave Ramsey’s Financial Peace University last fall, and it has really made a difference in our budget. I have probably paid off 1/4 of my total debt since November of 2017. I should have half of that total debt paid off by the end of 2018 leaving another 7 months to pay off the final fourth of my debt. I keep hoping all goes well and nothing major pops up and I could pay it off before then. I look forward to more of your posts and comments to keep me motivated. I’m a 67 year old grandma. I’m still working at least 4 days a week, plus I play organ at my church for pay. I am so looking forward to not being in debt when I turn 70, and if I keep the same Pace that I’m going now I will make it.
I am so encouraged by you. I am 52 and I am in a lot of debt. My husband and I took that course about 10 years ago. Still in debt. It doesn’t work if you don’t work it. Unfortunately my husband has a spending addiction and I am suffering the consequences. I am hopeful that it will work out. I am going to a support group and learning what I can do.
I can understand your frustration.I also married a man that has a spending addiction. We’re not in debt but I was so blind to it when we were dating. It’s one of the many things that has torn us apart over the years. I love reading these articles because I guess I just really long for the simplicity of only buying the essentials and buying “treats” for special occasions
Magnifymoney.com states that the average U.S. household is carrying $8,683 in credit card debt as of Feb. of 2018.
I needed this today, a reminder of why I am cutting out expenses and trying to pay off debt. When I got this morning I grabbed Dave Ramsey’s Financial University cd’s and workbook. I’ve dusted off my Gail Vaz Oxlade books and I’m going for it. I’ve reserved Cait Flanders’ book from the library. I am 56 and have a goal of no debt at 61. I am so mad at myself that I got to where I am because next year when my daughter goes back to work, I can’t help her by babysitting her child, thus saving daycare costs.
Your approach is eyeopener.
In our capitalistic-consumerism society,We are constantly brainwashed into spending more.
Peace and Joyful life requires very limited ‘Things’
Peace, Joy and compassion come from inside.
Thanks.
Ashwin Pandya,M.D.
Your 1) and 2) do not have to be “either/or.” If income increases, spending (not on stupid stuff) can also increase. I do believe that “living below your means” over an extended period (maybe 40+ years) can lead to mega good results… even if you start with $0.00.
But a lecture alone won’t do it. It takes daily personal discipline.
And most folks don’t have it.
“Living below your means” says… “Don’t buy the most expensive things (house, car, clothes, et al) that you can AFFORD”!!!
100% Agree. Living below your means = contentment. It means you value money in the bank as much or more than “things”. You value experiences (hiking, sewing) that cost less (or are free) more than the need for the latest clothes/electronics.
I was fortunate to have a father that instilled saving. I started saving for retirement at 21 when I got my first real job after college, 10% or more, never less (I am 43 now). I love knowing I could have more and I choose not to.
I so agree 10 years ago I was stressed out working all hours , trying to work my way out of debt. What I didnt realise my spending was still as great and in some cases i was spending money to go to work. Its sounds daft but i did that for about alot of years. I had a second job to pay for childcare.
I read John Harrisons book on Low Cost Living, after I suffered a mental collapse and it changed my life.
I realised that the answer was to cut back and reduce my debt at a pace i could deal with it. Im now debt free and saving for an emergency fund, so I will never get in debt again. I also work 30 hours instead of 60 per wk. It can be done, its hard work and you have to give everything to it xx
In an unwanted, by my parents, way I was fortunate to grow up poor. My father, 6th grade education, cashed his factory paycheck and then, sitting at the kitchen table, often with my sister and me beside her, my mother put the cash in envelopes: electricity, heating fuel, rent, food, saving for a possible vacation, etc. Anything left, not often, went into a savings account.
Everything they owned, including the kitchen sink, they saved for and bought when had cash in hand.
Years later and onward for decades I did much the same but w/o envelopes and with a checking account, later a credit card. From Peace Corps to US Diplomat, my only debt was mortgage and that was paid off years early. Appliances, vacations, wedding, cars paid in full when purchased. Yes, I use credit cards as a great convenience. No need to carry cash around. Pay in full every month on auto pay from checking account. And I found one that gives me 2-5% back on every purchase, cover any use of lost or stolen cards.
Now 76, living in a continuing care community paid for by all the money not wasted.
Teach your children well…
Myra, from what you are describing, I don’t think that this article applies to your situation. Joshua says, “Of course, simply spending less may not be the solution to every financial problem that we encounter. But it is the solution to most.” Without really knowing how much you make, you could very likely be in the former category. I personally think that he is speaking to those who look at their income during tax season and say, “I make enough money. Where did it all go?”
I would suggest that you check out Dave Ramsey though. It is a good idea no matter what your income level is, to create a budget. I would go to daveramsey.com and check it out. From someone who has become debt free by using his system, it does work.
I am a hard-working-minimum-wage single mother (2 children) it is difficult to make ends meet due to high rent (I live in NY) food is very expensive as well. transportation and household personal care products are a bit of a dent. I have been trying to live below my means but, unfortunately I have no idea how to make savings work on a single income. Does anyone have any advise tips on how to stretch my money and set up a savings for retirement and emergency?
Check out Suze Orman- Women and Money, and Dave Ramsey:) great resources.
This is very simple but has potential to encourage you and show that you an do it. Make a goal to save $10, then $25, and then $100. It may take months, but every 50 cents or $1 that you have left at the end of your pay period, put it in an envelope or jar. Don’t use it for anything, just keep letting it build. If you sell something, put that money in the envelope or jar. It may not sound like much but it is a start to building a habit of savings. Do it for you to prove you can do this.
I’ve enjoyed the inspirational posts by Josh. For me, self discipline and saying ‘no’ comes w/o too much effort but I still struggle with contentment and the power money/advertising can have even though you recognize it. Josh wrote “financial discontent in my life has been resolved”. For me, there’s still a struggle with contentment and doubt that I’ll ever have mastered contentment. Keep up the good work and encouraging posts!
If you don’t like the bills, don’t have them. Just another way to make the same point. The spending habits of most in this country are really quite ridiculous and foolhardy. Destined for ridicule? Good. That means you’re onto something. Society likes to denigrate what doesn’t support its current conditions of capitalism.
Great article. I read a tip when younger that has stayed with me that is similar.
It stated that we swap our life for money and how much we have left is what we get to bank for a better future. It suggested tracking spending for a week and categorise each item as:
A = Essential (Rent, Bills, Insurance etc)
B = Important (Food, Transport, Fuel etc.)
C = Nice (Movies, Restaurants, Coffee etc.)
D = Impulsive (CD, Junk Food, Game App etc.)
I did it for a couple of weeks then added up how much money was being spent on C & D items. This was potential savings that I could accrue. I was amazed how much I was flittering away.
The above helped me to pay off debts and focus on my spending.
1) Having low self esteem
2) Not having any stimulating hobbies and
3) Failure or reluctance to accept that MOST of us are at best just average humans….until proven.
the above 3 results in a need to temporarily block reality thru spending on things that we delude ourselves into thinking that they will ‘enhance’ our ordinary lives and make us somehow ‘special’.
Once we see pretty much similar things with other people…..which makes it the new normal, we then try to up the game by buying more ‘things’, rather than doing activities that will actually improve us at our core.
Improving the core character/activities/hobbies of a person requires ‘efforts’ and ‘time’ which people don’t want to spend time on….so much easier to just click a button and buy whatever it is that you want.
Also the mindset that it’s ok to use someone else’s money RIGHT NOW (thru credit cards) rather than your own seems to be hardwired into the american psyche.
This is so true! Live below your means. The millionaire next door lives this way and is happy with his million and not stuff. I’m new to this new way of thinking and life, a lot of money passed through my hands until the day I realized it’s too much stuff and this has to stop. It has been so many blessings in disguise, sharing of the excess and able to be ok with what is left. Also taking time to help my parents sort their years of stored stuff hopefully to be helpful in their remaining years. Also helping unprepared friends move or put things into storage, all I could think was “tiny house and keep what is necessary”! I pray that my journey from here on out will be lighter in so many ways. My shopping ban has been pretty successful and I haven’t felt really deprived, but thankful.
We are a country of too much stuff. I moved around the corner after living in a house for 40 years. I filled four dumpsters because I didn’t want to move the stuff. I am throwing out everything I don’t need or use. If I buy a pair of shoes, I throw away a pair of shoes. I have cleaned out two houses full of hoarders — thinking they had to have everything saved. Nineteen truck loads of someone else’s junk got thrown out. The problem with these people is they junk up a house, get sick or die and someone else is stuck cleaning it out. PLEASE do a cleanout — no one wants your junk.
I agree with you Sally 100%! :)
For the most part though, I donate. I hate the thought of landfills being bombarded with all our junk.
We are responsible for our own possessions. it’s very unfair to leave our stuff behind for someone else to clear out. Trust me— the kids don’t want it! They have their own stuff!
I was witness to this recently when a neighbor passed away. She had stored up her clutter “The kids will want this one day!” —They didn’t!!! It took weeks to pack up all her stuff and head it off to local charities. I helped… and they made comments like— “WHAT on earth was she thinking!!!”
How sad :( — All the money she spent on “stuff” could have been cash in the bank. Ultimately—that would have been a better gift to leave.
I definitely affirm and encourage the ideas behind this article. I would offer, however, that you can waste a lot of time trying to “spend less.”
For example, if someone is trying to spend less, they could be spending more time seeking a better deal on the same kinds of unnecessary things they have always been buying. Obviously, not buying something in the first place is the best bet, but when there are things you DO need, there has to be an acknowledgement that spending less on those things often requires MORE time.
Sometimes searching for the best deal ends up taking/wasting more time than intended.
Thanks Josh I am having to learn to be content with what i have, one time that would make me feel less than equal etc but thats more insecurity on my level , but i have debt and its not going to go away on it own, debt owns me and i am not happy with that anymore, thats more of a stress than looking good or keeping upwith fashion etc, so i am having to take responsibility and deal with it, same as over eating, buying things i really don,t need only to give good things to charity shops that no longer fit blah blah its a vicious cycle, but i am getting there bit by bit and to be honest i think if i could sort it quickly i would never learn, i think a few well thought out realistic goals and sensible decisions are what i need to invest in at the moment love Jacqueline xxx
Powerful article! Thank you so much for sharing this knowledge! I constantly go back and forwards about my spending habits. I am trying my hardest to cut back on spending, and really try have a modest lifestyle. The part that hit home for me was…”Because I own fewer things that need to be cared for, I spend less time cleaning, organizing, and managing. I have more opportunity than ever before to pursue my greatest passions in life—however I decide to define them.” Thank you for standing in your truth, and sharing your story with readers like me!
Spending Less = Freedom to make a career change.
This is key, there are so many blogs focused on early retirement from unhappy careers. Spend-less, to save more, and need less to make the choice to change if you are not happy in your current field.
Could not agree more! I just quit my job last week because I was unhappy. I just interviewed and accepted a position at a juicery & coffee shop. Sure, I’m taking a pay cut, but I’m doubling the time and happiness levels!
Good post.
I work personally only five days a week, only 6 hours. My job is scanning paperwork for a company and they don’t want too much work – since paper is limited. I get decent paycheck and much of free time. I said to my boss, that is okay, to do less work.
I can afford rent, food, other bills, basic needs and some shopping when for example something breaks. I have savings account despite of social security in my country, and emergency account too, for example of laptop breaks. I don’t have fancy mobile phone data plans. Just cheap basic plan. Is okey, don’t need the fastest speed etc.
Now some people I know barely have pennies left at the end of the month. They receive about 1600 € in cash, when I only 900 €. My rent is half of that with water and electricity. They actually one day asked me some money, because they had problems, to buy food and it was one week to paycheck!!! They both are working and barely can afford one day sick without paycheck. And they are always working and complaining about back pain issues. One day I saw them to scroll Zalando, this is where money goes – app in their phone. The men actually is okey with money, pays only bills. But the women is spend, spend, spend. And selling old things.
I mean people work less, spend less, have some free time.
I make less than them, and have financially free. My rent, no loans. No car note or related bills, since I use public transportation or my mountain bike. It’s ridiculous how some of my family does with their money. They had four TV sets, until I said enough and they actually reduced to two. And I am so much younger than them. They are 50+ and always paying bills and expensive mortgage. Renovated here too, windows they had were just working fine, they replaced for new ones. I mean people wake up.
One day I called my friend and asked for a trip to woods – I am working. They are working. They never have a time a day to spend with their friends instead spending it on stuff!
I’ve always been able to live fairly frugal while still meeting my needs. I have a mortgage and a little more debt than I’d like, but I don’t overspend. I have a challenge coming up to pinch my pennies for my daughter to go to a private, college-prep high school. I’ve got a plan and I can do it.
It is really hard to save money. I agree with paycheck the expenses also increases. Good advice.
Spend less really is the best piece of financial advice. By spending less…you open doors for so many of the priceless things life has to offer. Before you buy anything ask yourself if it is worth giving up the money that you worked so hard to earn.
I rarely spend my money on material/physical items, but I have a spending weakness when it comes to concerts, events, and travel. Although I can’t afford all the things I sign up for, it gives me joy… until I see my credit card statement and feel the anxiety build up. Then I spend the rest of the week hiding in my apartment, thinking of ways to save for the following week. It’s important to find a healthy balance, so I can still enjoy the things I love doing, but also feel 100% present without the panic and anxiety of the cost overwhelming what should be fun. Thank you for the reminder.
Thanks for the reminder Joshua, money slips through my fingers like there is no tomorrow, silly purchases here and there but they add up, if we want to blessed of God we have to be content and a good steward of money, wasted enough and what little i have i want to use wisely.
love Jacqueline