Let’s talk about “the simple life.” By that, I’m talking about an approach to our personal finances that embraces a spirit of simplicity, modesty, and frugality. It’s commonly thought of as a sort of “minimalist” approach to life. But I don’t really care for the “minimalist” terminology that some folks use. For the simple life is ultimately about doing the things necessary with your finances to “maximize” your way of life. I consider my perspective to ultimately be a “maximalist” mindset, instead of a mindset that operates out of a spirit of lack.
In today’s podcast, I talk about the following 7 tips in order to better maximize your life so you can life a more simple life. Please listen to the podcast above as I fully talk about each of these 7 points.
1. Live A Life Of Purpose, On Purpose
Buy things from a sense of purpose that help fuel your purpose. This will keep you from filling your house and life up with a bunch of things you don’t need or want. After covering the basic necessities of life, ask what purpose everything you buy ultimate serves.
2. Maximize Your Income– But Don’t Try To Become Rich
You shouldn’t try to become wealthy. Trying to become wealthy is a road fraught with much difficulty and moral traps that will probably destroy you. If you become wealthy, it should only be the result of good habits that pay dividends over time, and being a little lucky along the way. Seek to earn what is necessary to live the life you want to live, which ultimately flows out of your purpose.
3. Don’t Be Stingy, But Do Be Frugal
There is a difference between being stingy and being frugal. Being stingy will cause you to fret over every red cent you ever spend, will rob you of joy, and turn you into a jerk. Frugal individuals are people who understand the value of things, and what it means to buy things that are truly worth spending their hard earned money on. Stingy people are just misers who have the inability to see the value or worth of anything, and as a result they are poor stewards of the money they do have.
4. Be Generous
A spirit of generosity should dominate your life. Live life with open hands. You should find it easy to give to causes and people you believe in. And in having a spirit of generosity, it means you will gladly give good money for things of good value. Not only in the non-profit sector, but in business and trade. Richly reward those who provide you with excellent goods and services. Pay top dollar instead of always seeking the bottom dollar or cheapest price.
5. Be Thankful And Content
You don’t need to always buy the latest and greatest or the biggest and baddest thing to hit the market. But with that said, don’t buy cheap junk either. Enjoy nice things as the fruit of your labor, but don’t live a life of extravagance. Take an Epicurean approach to life, where you live modestly, but indulge in the things truly worth indulging in. Buy good quality things that have great value. As famed investor Warren Buffet has said, “Price is what you pay, but value is what you get.” A spirit of thanksgiving and generosity will cause us to buy only those things that truly add value to our life, and help you be content.
6. Don’t Live Within Your Means, Live BELOW Your Means
If you are in a two income household, if possible, live only off one income. Avoid debt, and pay in cash as much as possible. Having excessive debts shows you are living outside your means. Don’t be “house poor,” and when possible buy your cars in cash (or with a modest loan), and drive them until it’s no longer practical to do so, if you can afford to do so. Try to keep your total debts (home, auto, etc) below 25% of your gross household income (income prior to taxes). Don’t let the things you own end up owning you. As Dave Ramsey says, “Don’t try to keep up with the Jones’s, the Jones’s are broke.”
7. Save And Invest
Life is full of things both certain and uncertain that will happen to you. Prepare for the things you can reasonably expect to happen as well as the things you aren’t even aware of yet. “Life happens,” so prepare yourself financially for such happenings. No two months are ever the same financially, so, build margin into your personal finances so that you can save the money necessary to accommodate wild swings in income and expenses.
Related Podcasts
- To Hell with the Rich! – Episode #3
- 7 Money Saving Tips – Episode #7
- Lucky To Be Broke – Episode #13
- Critiquing Dave Ramsey’s Total Money Makeover – Episode #48
[…] 7 Tips For A More “Simple Life” – Episode #78 […]