Minimalism Archives - That Girl On Fire

Intentional Spending, Minimalism, Money Tips

What We Absolutely, No Way In Hell, Do Not Spend On

If you’re plodding along on your journey towards financial independence by saving as much as you can from what you make, squirrelling away that money into investments, and adopting minimalist habits to create momentum for your efforts – congratulations to you. Intentional living really is the secret sauce to the FIRE movement, which includes understanding what you won’t spend on as much as what you will. Here are the things we don’t spend on ourselves to help us achieve our own FIRE goal faster.

Fast fashion.

Generally for me, any outfit that I can only wear a few times isn’t a good idea from a financial perspective, let alone an environmental one. It takes significant energy, water and labour resources to create textiles in the first place – so to only wear something once in light of that just seems like a terrible waste.

I also think the quality of fast fashion is lacking. Poorly made items disintegrate faster, are laden with harsh chemicals – like bonds and glues – and are not colour fast by design. Plus, the sizing of many fast fashion houses varies greatly, which makes buying clothing and shoes pretty confusing for me – I’m a 10 in some shops, 12 in most, 14 in the rest, and if something doesn’t fit, I’ve got to go through the hassle of a return.

All in all, I’d much rather buy staple pieces that I can wear for many years, or vintage thrift finds. I maintain a capsule wardrobe made up of 30 items across dresses, pants, shorts, shirts, tees, kaftans, pyjamas, and then seasonal things like swimmers and an Oodie. It works for me and I follow a one-in, one-out system when I buy something new so I don’t have to sit on too many items at once.

Things I could upcycle from what I already have.

I love the idea of a second life for my items, and upcycling is a great way to keep costs down for things you’d have to buy otherwise. For example, if I buy pickles or olives, or a sauce comes from a jar – I keep the jar.

This is then used as a drinking glass, a vase for vines and ivy (our home is crawling with it) or condiment containers, like at Christmas when I make fudge, cookies, jam and lemon curd for gifting.

I’ve used old boots as flower pots, seashells as homemade soap containers and earring holders, hangers as jewellery holders hung on the back of my wardrobe door, an old toilet roll painted as a phone stand, old clothes cut up as kitchen rags… I’m sure you get my point.

It’s easy to go nuts with this so I think the key is being mindful about what you bring into your space in the first place, but my general rule of thumb is not to buy something if it’s feasible enough for me to make it myself from what I already have. This list is actually super cute if you’re looking for some inspiration.

Anything available through a loan service.

Libraries are one of our most underrated services in developed countries, and historically responsible for enormous levels of literacy and comprehension. Most of my books come through my local library, and I’ve thoroughly relished being able to bring my son in on this joy.

I’ll only read books through my local library (I did have Audible for a while during babyhood because reading paperbacks sent me to sleep – good old chronic sleep deprivation). Given I read between 10-20 books a year, this is a sound investment.

I also created a baby toy swap system with friends. We regularly swap toys to keep things fresh for our kids and reduce the need to fill our home with clutter, and I also researched a local toy library in my area which we pay a small yearly membership fee for to bring out toys on loan for a month at a time. It’s awesome.

Things designed for single-use.

In our home and car, you won’t find single-use items like paper towels, napkins, paper plates, Chux, disposable razors, dryer sheets or plastic straws or bags. That’s not to say we’ve never used these things, though. In the early months of parenting, we were exhausted and dumbstruck, and a lot of conveniences slipped in out of necessity.

I think this is actually a really important point to focus on for a moment. I’m not in any way demonising the use of single-use products if your life necessitates it. At various points in raising a child (newborn stage, while toilet training, when he has been sick) we have had to. I expect the same would go for looking after someone ill, or caring for a person with special needs. Sometimes convenience to preserve your mental health and wellbeing is important.

If you don’t need to, though, I think single-use items do come with a hefty price tag – and it’s one I’d rather not pay if other options are available. A lot of the cost of single-use plastics are built into the cost of the product or commodity itself, so it’s hard to separate out. But if you weigh up the cost of the one-time purchase of something that’s built to reuse, versus the multiple purchases of something only designed to be used once, it will quickly add up in the latter.

We look for the reusable version of many products, and you best believe we use ‘em to death, honey.

Hype products or gimmicks.

The amount of strength it takes to abstain from purchasing the latest wangle dangle for hair, beauty, skin, lifestyle, fitness, transport… It’s a lot. I like a shiny new thing. But, in my 31 rotations of the sun (and having worked in marketing for many years now), I can smell spin a mile off.

So, I don’t buy hype products, and I especially don’t buy them as soon as they’re released – mostly, because companies are using urgency marketing and trying to feed a fear of FOMO, and that’s gross.

I’m a diehard beauty fiend and could spend all day browsing the aisles of MECCA. Still, I have one of each beauty product I use and I will never purchase another until the one I’m using is finished. When I do purchase a big ticket item, I make sure I’m really, really, really sure first. My TM6 (Thermomix) took months of deliberation. My Dyson Airwrap was similar (which I actually returned due to it not working for me). Our Mazda we bought secondhand after shopping around for weeks, and negotiating.

The same goes for gimmicky toys. No shade on those who used those self-rocking bassinets… but like, over $1,000 for a baby bed?! Almost all of the toys we ever bought were secondhand, or loaned from a toy library. Our son doesn’t know the difference – and when he does, he’s been involved in the buying process, which can be a great financial lesson to teach a child early.

I saw on a fridge at someone’s house once that they were asking for $5 instead of birthday presents for their childs’ 5th birthday. It was going to go to his spending fund, so he could buy a big-ticket item he really wanted. It’s unconventional but I absolutely love this idea. It’s affordable for attendees, it reduces gift clutter and it allows the child to actively save and spend their money. I think that understanding this process for kids (and starting them early on it) is invaluable.

When you’re budgeting for your own baby, here are some things you might consider too.

Things I spend on (but in a considered way):

There are some things I do think it’s worth spending well on, like:

Homewares. Everything in my home is alive and mostly from thrift shops – including throws, pillow covers, artwork and glassware. I would describe our home as jungle-chic. It’s eclectic, with lots of natural timber and lively greens, then pastels and pops of colour like bright yellow, orange and blue throughout.
Scents. I use high-quality, organic essential oils through diffusers instead of scented candles. These are expensive but worth it as we’re big proponents of aromatherapy. (No, I don’t push MLM products).
Good quality nail polish. I always have my nails freshly manicured, but they’re usually the same colour – pastel pink or white.
Mattresses and bedding. We use flaxseed linen bed sheets and our mattresses and pillows are from Koala and Ecosa. Sleep is important to all of us and hygiene is good both in the way we sleep and what we sleep on.
Whole house water filtration. What we put on our skin and hair and into our bodies matters to me, and I also get hydra-facials every few months.
Fresh flowers, because I love them. They are such a treat.
The Thermomix as I said earlier. Partly because it made sense for us with a young babe who was starting solids, and secondly because we use it in the place of other separate appliances (rice cooker, steamer, peeler, chopper etc).
Travel. It’s a necessity, however there are ways you can keep costs down, like in the case for a honeymoon.

January 4, 2023/1 Comment/by Michelle

Minimalism

Managing Business Financials As A Minimalist

It’s so easy to get wrapped up in the fallacy that acclaim and success are direct outcomes of how much we earn, or how complicated our affairs are.

Accomplishment isn’t linked with complexity. We can merely “work to live” and still make major bank with the simplest of systems, workflows and personal productivity ethos. I do every month.

It’s almost comical how simply I manage my business financials as a minimalist. People often think I run an action-packed show, full to the brim of backend sorcery and financial formulas that keep the FIRE journey ablaze.

Does that mean I don’t work hard? No. Does it mean I’m not ambitious? No.

It simply means that my startup phase of working consecutive 80-hour weeks are behind me, because I know how very possible it is to achieve low-touch profits.

My four simple hacks for managing business financials as a minimalist, all yours.

Uncomplicated profit statements.

There’s nought more important in a small business than the ability to make money. And in the absence of a regular paycheck, this amount can fluctuate dramatically between seasons, recession periods, and even month-to-month.

So, keeping track of it all helps with forecasting – think basic budgeting, but also measuring periodical trends for dips in cash flow (so you can squirrel cash away for those times), and an idea of your tax liability so you can save (or invest more in the business) ahead of time.

Cue simplicity. I use a basic Excel formula that contains:

Who the client was;
The payment gateway used;
The full amount earned for that client in the calendar month;
Whether they’ve been invoiced;
Whether I’ve been paid;
How much I’ve sidled aside for tax, super, important insurances and HECS for the month.

I try and always send final invoices at least a week before the end of the month so that my payment terms (7-days) are honoured within the month, but if they go over, I move it into next.

I track my financials by when I get paid, not when the work was done. Why?

Because labour is fluid, but income is concrete.

Income from my shares doesn’t get logged here because we reinvest them (although tax needs to be paid on the dividends – I organise that with my accountant separately), however I do include side hustle income on this spreadsheet.

Tax time made easy-as-pie.

Very little strikes fear in the heart of the free agent as June 30.

Tax time, for many, is a frantic hurdle race to collate receipts, measure up profit vs loss, calculate GST and cry a lot over a mentally prepared potential tax bill.

But it can be a lot simpler than this.

Firstly, I know what’s tax-deductible and what isn’t, because I’ve asked a lot of questions. Thanks to my countless hours on the phone to the ATO, or running things past my accountant, I’ve kept a simple Google Doc dot-point run sheet* and refer back to it whenever I’m iffy on a business purchase.

I use that clarity to make decisions on what and how to spend on and in my business, and I track every expense as-I-go using an accounting software that has a screenshot uploading feature.

Digital receipts are perfectly legal, according to the ATO, and it means that I can recycle the paper version straightaway, instead of letting them clutter up (and fade anyway, as they always do).

I categorise expenses really specifically (payroll, marketing, administration, travel, rental overheads etc), which helps me gauge a monthly breakdown of where I invest most in the business, and at the end of the financial year, I pull a report and reconcile it against what I earned. It takes all of ten minutes.

*On the note of “tax hacks”, I also leave hints on things I’m likely to forget over the year, like how I treat international clients for tax purposes, how to easily report on my share or property earnings or how many cents per kilometre I can claim on my car.

I forget every year, and it saves me from annoying my accountant with an annual Groundhog Day series of questions.

Work with a small business-focused accountant.

I’ve always been my own book-keeper, so that I can maintain total oversight into the day-to-day money management, but when dealing with Uncle Sam, I defer to an accountant who has both a small business background (owning their own) and managing the financial affairs of others like mine.

I think staying away from mainstream accounting firms is a smart move.

Working with someone who has a deep knowledge of specific SMB taxation policies and laws (including how they change) can help avoid costly mistakes if randomly audited.

For me, it’s a tax-deductible expense and as it’s a person who I have a relationship with, I can ask questions any time via email or phone and she gets back to me quickly with everything I need.

Keep subscriptions to a minimum.

There’s no award for spending the most on exxy softwares, no matter how flashy they seem. That’s not to say that some aren’t worth paying for (even at a premium), just that they aren’t all.

I have the basics – obviously email, my website hosting, a robust accounting software… but in any case, it’s not that expensive software keeps me organised and minimalist.

On the contrary, keeping things simple and efficient is what gets me away with using the free version of the software. So it’s cheaper. And as a digital business, I need a good tech stack – I have lots of things going in and out all the time, but I don’t need to make it overwhelming with toolkit clutter (I natter on about my tech stack more via that link).

The most complicated part of running your business should be anything and everything external. Like clients, or customers… the weather, even. Nothing you can control, like money and expenses and tax. That’s all well within your hands.

January 22, 2020/2 Comments/by Michelle

Minimalism

Minimalism And Money: Peas And Carrots

Minimalism and money are two things that go hand-in-hand.

And while you might think that the notion of having fewer things, or maintaining more simplicity in your life has little to do with the way you manage your cash – you’d be wrong.

In fact, minimalism has everything to do with money. Minimalism is about the re-evaluation of priorities.

It’s about understanding our internal motivators, what brings us joy – and of course, what doesn’t – and cultivating spaces around us (physical, digital and psychological) that are conducive to a life more full of shiny feelings instead of shiny things.

As humans, we have very precious and finite energy stores, yet we spend so much of it on keeping up appearances. We reach for conveniences because we’re too time-poor to even have time to think about how time-poor we are, and we’re so used to being bombarded with products, subscriptions and offers that oftentimes we don’t even notice we’re being lured in until we’re within the predatory grasp of the sale.

This all comes at a major cost. Not just to our health and ability for self-awareness, which I truly believe erodes over time with too much clutter and overwhelm – but to our financial wellbeing. People think it’s expensive to be a minimalist. I think it’s expensive not to be one.

For many years, I have lived a life that is fundamentally minimalist, both in how I keep “earthly possessions” in the physical world around me, but also how I view situations and problems, treat others and prioritise things that matter to me. The benefit of this on my wallet has been enormous, so here’s how I apply minimalism to my everyday:

I don’t buy what I don’t need. Genuinely.

As in, I rarely buy material things ever – and when I do, I go through a rigorous thought process beforehand. Do I need this? Will it solve a long-term need? Is there something I already own that could do the job? Could I rent, or borrow this instead? Will it hold, or even grow in value (should I choose to sell it later on)? Rarely do things I want to purchase tick all of those boxes, and so I can filter through a lot of ‘nice-to-haves’ in order to find what I really do need.

Intentional spending gives you breathing room to properly, and fully, evaluate. It exercises your brain to think critically about things it is programmed through predatory advertising to normally have no say in, and affords you the benefit of time and purpose to help you conserve your money for things that are worth the exchange. That makes them all the more worthwhile when they come around.

I reuse and find other uses for the same item.

Many items are, by design, multipurpose. We just often don’t believe, or see it.

Certain oils are great for the hair, skin and for cooking. A myriad of cleaning products and laundry detergent can be created from simple soap bars and white vinegar. Jars can be used as storage and then pulled out for decoration later on. Toothpaste is good for everything from dental hygiene to burns to jewellery cleaners.

When you see the potential for second lives for your items, you negate the need to have something specialised for every purpose.

This clears space but also keeps your bank account looking pretty full, especially when you consider how brands typically markup niche product ranges. And when you couple this with being less wasteful, like bringing your own jars, bags and pouches when shopping, you’ll see just how damn expensive, and limiting, packaging can be.

I keep things simple online as much as offline.

My digital life is as simple as my physical one. Everything is neatly collated and categorised, and the second I’m finished with something, there’s no archive or memory bank – into the bin it goes. I love holding onto memories, but if I’m honest with myself, I find more solace in feelings instead of things.

I’ve realised that if my nature is to archive something away, then the likelihood of seeing it again before at least another year or two is very low. And besides the fleeting chuckle of looking at a physical photo of a day in my life I cherish, there’s not much else that happens other than I put it back away. So, for files I really love, I keep them in a single cloud folder on my Drive, but mostly, I don’t keep a hold of anything but money.

Because I used to work in the media, I like to stay informed and aware. But when there are hundreds of companies vying for my attention with their updates, I’ve learnt not to feel guilty about subscribing only to a select few media platforms I know and trust. This is the same with entertainment.

There’s something very satisfying about having clarity and direction in what you allow to burn through brain cells every day. It’s kind of like sitting on a bridge on a highway, watching the clouds move when all the cars are frantically speeding on the lanes underneath and around you.

And while some of these things cost, because we absolutely should be paying for ethical, impartial journalism, and really good entertainment, what I get is way more valuable than any subscription fee. I’m afforded the luxury of staying present and in-the-know without the constant, mind-numbing noise of literally everything else I don’t care about, but that I’d undoubtedly be ground down to spend on.

I throw complexity out the window when managing money.

People sometimes say to me a little sheepishly “I only have a few bank accounts where I store my money.”

Well, that’s a couple more than I have. I don’t believe that there’s a complex formula to saving your money as a minimalist; at least not one I know anything about. I have a personal banking account for everyday transactions, a business account for anything related to my business (which makes tax time a dream), a bonus interest rate savings account for anything that’s not applied to the portion of our primary home loan that’s set up as an offset, and a credit card.

Managing my money day-to-day is simple, because why make it hard – and hard to remember? I pay my regular cost of living, business and maintenance bills, I shelve 70% into savings and investments (through separate investment accounts) and I live on the rest. I carry cash very infrequently, because I like having my money where I can see it, and I don’t have complicated insurance structures set up. They’re simple, run-of-the-mill things because that’s all I need.

Money management should be habitual and repeatable; with the same actions happening over and over every month. It’s the only place mundanity will help you thrive, whether it’s saving up or paying debt down. Make it muscle memory.

I keep a simple investment portfolio.

Much like my daily money management processes, my investments tick along just as simply. I pick investments that I understand and don’t require me to be very hands on – because at this stage in my life, I can’t be.

Property is one that requires a lot of upfront work, but significantly evens out, minus the occasional maintenance job, and shares – particularly the kind we like, ETF’s and LIC’s – are all bought, traded and managed online, with easy reporting when we want a clear overview of how our holdings are performing. We set up reinvesting automatically upon purchasing new shares because that’s extra work we can take off of our shoulders, and we don’t need to draw our investments as income right now.

Superannuation is managed from the one account (if you’ve got multiple accounts – combine, combine!) and I contribute concessionally to the tax-deductible cap (which is $25,000 for people who are self-employed). This is a regular part of my savings schedule every month.

Because we are long-term investors interested in growth (two-dimensional investments that grow in value and pay out income), rather than defensive assets (just paying out income, like the high-interest savings account above, which earns interest on the base amount deposited), the simplicity around our investments helps us to stay on top of it and make contributing habitual.

Maybe later, I’ll look into seed investing in startups and real estate investment trusts (REITS), but right now, we’re only interested in things we can easily manage and keep an eye on. Applying minimalism to the stage of life we’re at when it comes to our investments helps us to stay focused and make it a priority.

If it all became a bit too overwhelming, we’d probably sit back and stop, which would mean we’d be missing out on our investment’s most important moneymaker: time.

Ultimately, we’re hardwired to feel a lot of guilt and fear for missing out. We want all the things. All the content. Knowledge. Experiences. But what we forget is that a lot of that stuff doesn’t even apply to us, and it certainly doesn’t fulfil us. It drains our energy as much as our wallet. In a way, this makes us compliant and easier to persuade – moving us further away from what we really want.

Minimalism and money just makes cents. Going through the process of streamlining and cutting out crap is one of the most powerful things you can do for your finances. Looking after your money by looking after your time, and guarding your surroundings, is so easily forgotten – but so easy to put back in place.

February 28, 2019/0 Comments/by Michelle