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Here it is -- the most important financial advice you'll ever receive.
Spend less than you earn.
If you cut back on spending, you'll be able to pay off debt, build an emergency fund, give more generously, and start saving for college or retirement or a trip to Europe. Spending less will reduce your stress levels and improve your sleep. It might even improve your marriage.
Spend less enables us to achieve financial freedom. But in a country where 78% of us live paycheck to paycheck and the average American has almost $7,000 of credit card debt, the message to spend less is clearly not getting through.
Minimalism is not about living with no comforts or modern conveniences. But a minimalist does embrace the concept of intentional spending. Once you find balance by shedding the things you don't need so you can focus on the things that really matter to you, you realize that mindless or impulsive purchases burden and distract you. More than that, they steal your life energy.
"Your money or your life."
If someone thrust a gun into your ribs and said that sentence, what would you do? Most of us would turn over our wallets. The threat works because we value our lives more than our money.
Or do we?
As consumers, we act as if money has the capacity to meet all of our needs, wants, and desires. Most of us believe that if we had more money, we'd be happier and worry-free. That might be true if you make less than $20,000 a year, but people with six-figure incomes feel the same way. We place a lot of faith in our money.
But we need to remember that money represents our life energy.
When we go to our jobs, we trade our life energy for money. Life energy is our allotment of time here on earth. It's precious because it's finite and irretrievable, and because our choices about how we use it express the meaning and purpose of our lives.
So when we spend money thoughtlessly, or worse, use credit and spend money we don't yet have (thereby promising our future life energy in payment), we may be harming ourselves more than we realize. If we aren't receiving fulfillment, satisfaction, and value in proportion to the life energy we gave in exchange, we are the losers.
Financial freedom comes when you identify for yourself what you need, and consciously choose to purchase the items and experiences which actually meet those needs and bring you fulfillment. If you spend your life energy on stuff that doesn't ultimately satisfy and support your values, you end up with lots of clutter and a lot less life.
This is not about guilt and deprivation. It's about honoring and valuing your life energy, a limited resource. When you become conscious of your unrewarding spending patterns, you can start to use money in ways that bring you more contentment and well-being. And you will realize that you have enough.
Enough for survival. Enough comforts. And even enough little luxuries. With enough, we have everything we need, and nothing extra to weigh us down. We can appreciate and enjoy what money brings into our lives without purchasing anything that isn't needed or wanted. As the ancient Chinese book of wisdom, the Tao Te Ching, puts it:
"He who knows he has enough is rich."
This mindset also helps us avoid lifestyle inflation. Lifestyle inflation is the tendency we all have to increase our spending when income goes up. When we do this, it remains impossible to get out of debt, save, invest, contemplate changing careers, or work less. It forces us to keep working just so we can pay the bills. We may justify spending by saying, "I work hard so I deserve this." But we're putting ourselves in financial bondage. What we deserve is less debt, less stress, less clutter, more time, and more long-lasting satisfaction.
When we stop trying to buy happiness, we can start to discover our true calling and identity, which our culture usually equates with a job, but is so much more than that. When we gain financial freedom, we can use our life energy to build real wealth: knowledge, skills, creativity, relationships, community, gratitude, and generosity.