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 get out of 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.
Earl says
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”!!!
Kim says
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.
Ashwin Pandya,M.D. says
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.
Kathryn says
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.
Linda S. says
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.
Teresa says
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.
Adrienne says
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
Lizbeth says
Magnifymoney.com states that the average U.S. household is carrying $8,683 in credit card debt as of Feb. of 2018.
Helena says
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?
Holly says
Check out the Frugalwoods blog, they have many great articles to help you figure out wants from needs
Lara Murched says
Great blog! Thanks for the recommendation.
Myra Slankard says
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.
Tina says
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. Tkmoneycoach@gmail.
Best wishes. Loved the article!
Elaine says
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.
Katie says
Love this – so simple yet powerful – will start asking this question before every purchase ??
Lee Drozak says
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.
Jade Williams says
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 !
Mary Reynolds says
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.
Kate Daniel says
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?)
Devin Rosen says
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.