Today we have a guest post from another personal finance writer out there in the blogosphere, Lauren Campbell! Lauren graduated from college in May 2013 and has since lived in three different states. She’s a firm believer that freedom is better than anything you could buy at a store and that adventures are always worth it. On her blog, Stacking Twenties, she writes about achieving independence in your twenties through frugality.
I’m debt-free, but I save almost as aggressively as Kara pays off her loans.
Saving has always come naturally for me, even as a little kid. I like the stability of knowing that I can afford to take care of myself – having cash to cover a $500 car repair, or a couple months of unemployment, or whatever. I’ve had to take advantage of that enough times to know that it’s very worth it.
I recently learned about the idea of financial independence – accumulating enough money early enough in your life that you don’t have to be tied to your employment and can instead live off of the interest and do whatever you want with your time. The possibility has re-energized my savings bug, and makes it really easy to say no to unnecessary expenditures.
The thing about saving up for something as big and intangible as “My Freedom” means that it’s going to take a really long time to get there. My best estimate right now is that it’ll take me about 15 years (which still means I could be done with traditional employment by the time I’m 40). That’s way too long to be constantly depriving myself by just focusing on the goal.
Luckily, I’m a huge believer that you can live a very happy life for not a lot of money. That involves a lot of really simple changes (I only get books from the library, go to coffee shops about once a week instead of daily, don’t go shopping as entertainment) and a couple of larger lifestyle choices (I live in a super low cost of living city, and drive a ten-year-old paid-off car).
The best way I’ve found to save money while not feeling deprived is to focus on maximizing happiness. A lot of times, you’ll find that the thing you’re paying for is actually a feeling or experience, and there’s a cheaper way to get it. For example, I love long conversations with my friends over a few drinks. Instead of having those at a bar and dropping $15-$20 each, I have them over – alcohol usually costs about 80 percent less at a grocery store, my couch is more comfortable than a bar stool, there aren’t other annoying people around, and there’s no such thing as last call.
There are also a lot of free happiness maximizers – phone calls to friends, being outside, yoga/meditation, reading books, etc. You can achieve a lot by just thinking about who you really are, who you want to be, and why you’re spending your money on what you’re spending it on. I realize that sounds very hippie-dippie woo-woo, but it’s vastly improved my life.
By taking the time to think carefully about what I want my life to look like – not what will make it look enviable on Instagram, but what I actually personally want – I can spend according to my values. For me, the things I won’t skimp on are relationships and travel. I’m happy to cook at home and buy clothes on sale and at discount retailers, and don’t feel any deprivation by doing so.
It’s been a while since I told myself, “Sorry, I know you want that, but you can’t afford that.” Instead, every day, I ask myself, “Is that really what you want? Do you want that more than all the other things that $5/$20/$300 can buy you? Even being that much closer to your freedom? Will that make you happy, or will it just be something you donate to Goodwill next time you move?” (I’m somewhat of a minimalist, since I tend to move cities fairly often, and like to be able to do so in the back of my car. That, maybe even more than wanting to save money, means I’m very anti-junk-accumulation.)
If you were to meet me in person, you probably wouldn’t be able to tell that I’m obsessive about saving as much money as I can. I live a normal twenty-something life that includes happy hours and occasional cross-country flights and lots of Netflix. It just so happens to also include investing about 50 percent of my income. Try it sometime, it’s lots of fun.