This morning on the radio, I heard an ad for refinancing your home mortgage, targeting us listeners by explaining that the savings that come from a lower interest rate could be used to buy a new car or take a luxury vacation. But there was nothing about using the savings to actually, well, save! Ads like this remind me that we live in a society where other people often judge your quality of life based on the amount you spend, while the amount you save is seen as painful deprivation, belittled as “cutting back.” But if spending less in order to save more is seen as something that limits your life rather than enhances it, something to be suffered rather than celebrated, it’s no wonder that it becomes so difficult for so many people to do.
My last posting was about how I live a middle class lifestyle on $12,000 a year. Even so, I know that some people might have difficulty imagining themselves living like I do because I don’t have a big house or an expensive car, and I spend a comparatively small amount on leisure. Many people are motivated to reduce their spending but find it overwhelming to actually do so when nearly every day we’re encouraged by ads and even by family and friends to believe that the more we spend, the better our life will be. But I would urge you to consider that the opposite might be true – that the less you spend (and the more you save), the better your life will be.
The most important day to day benefit of spending less is being able to reduce your level of worry and stress about paying your expenses. Instead of living paycheck to paycheck, commit to a simple a goal of spending less each month than you earn and saving the difference and you will never again have to lose sleep over how you’re going to pay the bills. That’s not some hopeful goal to look forward to many years in the future. That’s an immediate benefit that can lift a cloud over your everyday life today. Wouldn’t this daily peace of mind improve the quality of your life more than whatever you’ve spent your money to buy?
Reducing your spending also means you won’t have to worry about what might happen if you lose your job. I’ve written before about how having ample savings gives you more freedom because it can tide you over when you’re not working. But even if you have no savings and simply get your living expenses low enough, almost any job (sometimes even part-time work) will offer enough income to pay them. Life becomes so much easier and more enjoyable when you’re not riddled with anxiety over the possibility that you’d need to find another high-paying job to pay for your lifestyle since your lifestyle already costs so little to pay for.
With that in mind, I’d like to go through my major areas of expenses and show why I think spending less in each area has actually improved my quality of life rather than taken away from it.
Housing. The decision I’ve made that most intrigues people is how I’m able to live in a studio with my wife. Aren’t I sacrificing my quality of life with reduced space and privacy, people ask. But I find it’s one of the best decisions I’ve ever made. If we had a larger house, we might spend a lot of our time in separate rooms; I might be in the bedroom whereas my wife might be in the living room. I’ve found our relationship has become much stronger because we share so much more time together in a single room. There’s conversation and closeness between us that just wouldn’t have happened if we spent more time apart. We also can’t run away from difficult moments as easily and being in a close space has helped our marriage because it forces us to work through things rather than avoiding them.
A second plus to living in a smaller space is that it really prevents you from collecting excess clutter. A lot of people pay for a larger house only to find they’re using several rooms to store stuff that’s gone unused for weeks or months. I don’t have space to store something unless I really need it, so I keep the clutter to a minimum, which in turns saves me money because I buy less stuff.
Other pluses: having a single room to function as the bedroom, living room, and dining room means less that I need to spend on furnishings, less that I need to clean, and easier access to all of my things.
Transportation. I know that in some areas of the country it’d be hard not to own a car. In fact, I used to own a car and couldn’t imagine how I’d live without one. But now I truly realize the benefits of getting where you need to go by walking, biking, or using mass transit as often as you can. Walking and biking provide much more exercise than driving everywhere. If there’s one thing you could probably do to keep in shape all the time, it’s to switch to biking instead of driving whenever it’s feasible. Walking and biking also give you time to soak in your surroundings and enjoy the people and nature around you, which is hard to do when you’re stuck in traffic.
Mass transit might seem like a tougher sell but what I love about taking a bus or train is that I don’t have to concentrate on driving. I can take a nap, read a book, have a snack, or chat on the phone. Not to mention all the time I save by not having to worry about car maintenance, filling up gas, sitting at the wheel in traffic, or fighting parking tickets (the last one’s probably more common in New York).
Food. Cooking at home has several advantages over eating out. For one thing, it’s a lot healthier and often tastier when you’re using better ingredients than they use at many restaurants. And when you’re eating healthier, you’ll look and feel better too. It’s usually faster to prepare something yourself than to get in a car, drive down to a restaurant, wait to be seated, and then wait for your order to arrive. Finally, eating at home is a much more casual and relaxed experience than going out to eat. In my own home, I can dress down as much as I like, put my feet up, and not worry about it. You can also host a pot luck and invite friends over to share a much wider variety of dishes than you could have eaten at a restaurant.
And with a little practice, you can cook something that probably tastes almost as good, as good, or even better, than if you ate out.
Health Insurance. Fortunately, employers typically cover most of the costs of health insurance, so usually there aren’t much savings here. Still, focusing your efforts on preventative care by eating healthier and exercising even if you have insurance will automatically allow you to go to the doctor less frequently and pay fewer deductibles. And you’ll be healthier for it.
Personal Care/Communications. The costs for a cell phone and personal hygiene probably aren’t that much in any event so I wouldn’t worry a whole lot about the expenses here. Remember, it’s in reducing your large expenses that you see the most benefits, not by stressing out over the small costs.
Leisure. People will tell you that you need a lot of money to have fun but I’d argue that you can have an even better time spending little to nothing. Many of our modern leisure diversions are simply expensive substitutes for more natural thrills that are arguably even better. For example, two of my favorite hobbies are sailing (almost free because I joined a local sailing club where we use shared boats) and hiking. Electronic gadgets or luxury vacations just don’t seem like a big deal when you’re enjoying the excitement of sailing on the open water with the wind at your back or hiking pristine trails in nature. I also do martial arts for $15 per class, which is an inexpensive hobby that teaches you to keep your mind and body fit. Other cheap and free things that I do are woodworking, reading (your local library is free), learning a new language, getting together with friends, and laying in the grass in the park. You really don’t need much money to build real connections with nature and people, learn about yourself and the world around you, or have an exciting experience.
Each time you’re wondering about the downsides of reducing spending, think instead about the upside and the benefits, and you’ll see that spending less is not “cutting back” but is a life lived well or even better. So the next time someone discourages you from saving by telling you to live a little, you can happily save that money instead and respond, “I am!”