Live Smaller, Simplify, Live Mindfully… It’s Definitely Good for Your Finances

Seems like every newspaper or magazine you read these days talks about some hipster who has sold the $5 million home he bought with the money he made writing some emoji app and has downsized into 400 square feet with a Murphy bed.

Small is all the rage. Small living spaces, less stuff, small carbon footprint, and raising your own chickens. I cannot make a comment about the chickens, but the other items are right in my wheelhouse. All this “reducing the size of your house,” “mindful living” and “living simply” is all about spending less on stuff from a financial standpoint at least.

I know a little about spending less. Articles have been written and studies have found that one thing that promotes happiness is experiences. Driving a certain car, having the right clothes, etc. do not promote happiness, but experiencing life does.

How does this relate to your money? It relates in 2 ways (not necessarily in this order):

  1. If you are happier, you spend less on things like therapy, booze, retail therapy (e.g. clothes, cars, jewelry, homes, etc.)
  2. If you are having experiences, you see how nonsensical “keeping up with the Jones’” is and you spend less on clothes, cars, jewelry, houses, etc.

I think you’re seeing the trend here. You do not need a bunch of stuff. You will be happier with less stuff. Your wallet will be happier if you let go of the stuff. You will have more money to save for experiences if you buy less stuff.

Critically, feeling the need to keep up with neighbors, colleagues or family is deadly to your wallet and pretty empty for your soul as well. Most people I see who overspend feel entitled to live like their sister, neighbor, college roommate when their life circumstances do not match that. Letting go of this need, will be the best thing that could have ever happened to your wallet.

But what about the experiences, don’t they cost money? Yes, they do and some can cost a lot (e.g. climbing Mt. Everest, etc.), but saving for specific experiences, be they travel, classes, gatherings with family or friends, still leads to less spending in the long run, because you are happier.

Instead of spending $150 at Target on stuff you cannot even list, you are spending on yourself by having an experience. You are content and you know your saving for experiences and you won’t get derailed in Target. You can also save better for experiences like travel and family gatherings because they have to scheduled and planned for. Thus, you can save a bit each month and then have a great time.

What I would love people to get away from (financially, that is) is acquiring lots of stuff. It takes a lot more space to house the stuff, it does not add to happiness and it can suffocate you if you cannot get rid of it when it is time. It also creates credit card debt and depletes savings.

Think about what you really need to be happy and what makes you happy. Save for it, so you do not charge it (will make you happier and less anxious just by doing that) and make a decision to spend less on stuff. Your wallet and your soul will thank you.