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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
https://thatgirlonfire.com/wp-content/uploads/2019/02/TGOF-Pink-Background-And-Keyboard.jpg 4000 6000 Michelle https://thatgirlonfire.com/wp-content/uploads/2019/02/That-Girl-On-Fire-Web-Logo-Header.png Michelle2019-02-28 16:54:372019-07-24 21:01:24Minimalism And Money: Peas And Carrots
Financial Independence

We Didn’t Start The FIRE: Our Journey To Financial Independence

To start off our financial independence story, I’m going to take you back to a smaller version of me.

Still as curly-haired, still as gappy-toothed, but much less wrangled by the world. I would read books widely and voraciously (thanks for making reading such a big part of our lives, Mum), and had a particular penchant for books about magic, mystery and grown-up women kicking ass.

On the latter side of things, this usually came in the form of stories of young women entering the workforce for the first time.

They were well-educated, worldly, ambitious, strong-minded and unafraid to take risks and meet challenges head-on. Mostly, they were university grads, working an internship in a fabulous company – climbing up the career ladder to success, perhaps falling in love en route, wowing their boss, befriending the “uncool” colleague, and sparring with a major competitor (always female… why?!).

I wanted to be her. Not her, as a person, but what she represented. I wanted more than anything to work. I was hungry for professional grandeur. I was a diligent student, I enjoyed learning, I enjoyed the routine and the discipline and as someone who, despite a rebellious streak, tends to want to please people inherently – working was the perfect environment.

So, I studied hard, thought long about what I wanted to do, and eventually got my degree with a number of other voluntary professional achievements that would bolster my graduate applications.

As I turned out, I wouldn’t need to apply for much. I was offered a job with an events company right before I finished Uni – which was hell on earth, and I left within the month. Imagine being thrown to the wolves with zero training to organise a huge national conference, and then being asked two weeks into the job why no-one was signed on as a speaker yet. I bowed out pretty in a pretty undignified way from that gig.

Enter stage left the little voice in the back of my head: “Imagine having to feel that anxious for forty years?”

Be quiet, I told it. That’s not a good example, it wasn’t the right job. You don’t even want to work in events. That’s not what you studied. It was a stop-gap.

Next, a job as an editor that came after a writing internship. Difficult work, difficult people (that’s high-fashun for you) but rewarding. And there’s that little voice again: “Wow, I can’t believe you have to work this hard for forty years.” Again, I silenced it. Not a good example, remember – I won’t be here much longer. I’m cutting my teeth writing and I’ll overlook everything else for now.

Then, a dream job. Amazing boss, a revolutionary startup in the technology sector, an opportunity to build a team and solve a genuine problem to improve the lives of other people.

And what a ride it was for the next two years (I often credit this job to most things I know about leadership, growing ideas, communicating well and pivoting well from bad or stressful situations). Follow that by a few different roles within another startup, all with great learning experiences and relationships of its own.

But still that voice. “People die at 70, you know? Like, the time you’re supposed to retire. People die. You never know. Crazy that we all just accept that, right?”

Yeah. Right. Actually, yeah! Right! Cue emotional breakdowns in my living room at 10pm at night if I wasn’t too exhausted by the workday, sobbing into my husband’s arms. To me, there was just no other option. You work. You work. You work, says the robot. You must work until you’re old. And I didn’t like it, nor understand it. Something about it turned my stomach.

As a little bit of background, my husband and I had been good with money up to this point. This is not a typical story of being terrible with it, living with the silent marriage-ruiner; unsecured and personal debt, and making bad financial decisions.

Since we’d been together, we’d be saving routinely and often. By the stage of said emotional breakdowns, we had just moved into the home that we had bought in Sydney’s inner-west fringe (with a 20% deposit) during the peak of the property market in 2017, we were salary sacrificing for super, we had a nice little share portfolio ticking away, we had paid for our second-hand, but very nice Mazda CX7 in cash and were also about to cash-flow our new kitchen, and some of our wedding.

So my concerns weren’t about having enough money. In fact, it’s never really been about money at all.

Rather, it was the emotional weight of the longevity of work. It was the unknown of my future – what would happen to me, or my husband, my family, or even children we might have? Why wouldn’t we want to maximise our time and the hours in our day to enjoy the things we loved, now, rather than wait until “the golden years” later?

No-one could anticipate where we’d all be – and considering the known statistics on how people’s health and energy deteriorates by that age, being dependent on something external and out of my control to get there felt just so… illogical. But to my knowledge, there was no other way – and so I emotionally, and begrudgingly, just accepted it for many years. We had been saving and investing – but for a retirement we believed was out of reach for many decades yet.

When I first found out about FIRE (Financial Independence Retire Early), I remember the warmth in my body, radiating and heating upwards from my toes to my head. It was Mr. Money Mustache’s blog and it was a passing recommendation made to me from one of the smartest people I know; an old colleague, and now (along with his wife) a good friend.

I remember reading his words, his maths, his reasoning, and just… everything clicked. The rest of that day (sorry old boss) I got my hands of every piece of material I could about him. Every podcast, every interview, every TED talk, every everything. And that was Pandora’s Box. It was the tip of the iceberg in terms of what the financial independence, retire early community was putting out there. There were bloggers! Women! Like me! My age! My income! Doing it (or already having done it).

FIRE opened up a world of possibility that defied the typical ideas of working for the exchange of time for money. It gave people, like me, a sense of control and financial empowerment. It gave people a tangible timeline, it allowed them to find abundance in simple things, to shake off the consumerist coat they were sweating in, and find joy in their daily work – knowing it wasn’t going to be forever.

For many, it allowed them (as they wound down to their financial independence date) the opportunity to volunteer, travel and work to completely better the life or someone else, without fear of lack of a paycheck. It allowed them to spend more and more time with their children, enjoying the little developmental things their children did that they otherwise never would have been around to notice; or relish in those important final days in a parent’s, or a friend’s, life.

Some people decided to keep working. Some had the flexibility to take time off to search for a job they had always wanted to do, but had never had the time to apply or network for. Others started their business, knowing it might not be profitable for a year or even more, and not worried about that in the slightest. Some filled their days gardening, turning a hobby into something they could monetise, or even not at all. But that beautiful notion of choice is inherent in all of these.

And something I have come to believe that every human fundamentally deserves. Because sure, we technically can do all of those things outside of a full-time job. But when you factor in the commute, the energy-sapping day, the after-school routine, the random life admin you only have time for outside of office hours and weekends… how much time do you really have? Not opportunistically. Not “make it a priority and just do it if you’re that unfulfilled”… how much time do we really have?

In 2018, I started my copywriting and communications business, Wordy and Smith. And to say that starting a business is the best thing I’ve ever done in my career would be an understatement. It is absolutely incredible. I love my work, I love how I have total control of my time, who I work with and what I earn. But that little voice you read of earlier? Still there. Loud and clear.

So it’s also incredible in another way. It proved to me that I was on the right track, and that my feelings and discontent with work were valid. That I don’t want to be spending my time working, beyond another decade at the most – but at least I can really enjoy the journey to get me there.

How does my husband factor into all of this? He’s not quite as emotional as I am, but this is certainly something he’s excited for. Did I get him onto the financial independence bandwagon? Yep. Did he teach me a lot about money management on the way, though? You bet he did. We complement each other in a lot of ways, and we’re now completely dedicated to this journey. He might have taken a little longer than me to come around, but what matters is he’s here now – and he’s really excited for the future of being financially free (he even has a few business ideas he’s mapping out).

We didn’t start the FIRE, but you know what they say, FIRE always spreads with a spark.

Hopefully this is yours. Welcome to our journey to complete financial independence.

February 27, 2019/2 Comments/by Michelle
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