The following is a guest post from Martin of Studenomics, where he helps you with launching something right now. Why waste time when you can grab control right now?
When we think of saving money, we get that same feeling in our guts as we do when we think of dieting. Do I have to be miserable all of the time? I work too hard for that!
Nobody wants to be deprived when it comes to spending money or eating food. It’s a horrible feeling. This is why most of us give up. Nobody wants to be missing out on life while everybody else is out having fun.
What’s the fun part of trying to hit financial freedom?
It’s seeing how you can use your creativity to save a buck, but still have a blast in the process.
It’s seeing how you don’t have to feel miserable while saving up.
It’s fun to live a little differently than all of our friends.
Instead of giving out theory, I wanted to share some stories on the topic.
Want to go out without going broke? Do you want to see how you can have fun while working towards financial freedom?
Find friends with similar goals.
You’re not alone. There’s plenty of people out there that want to also save money and have some fun. I find it very helpful to have friends with similar goals. If you guys share similar goals, you’ll never have to feel weird about making plans.
For example, I used to hang out with friends that always wanted to go out. All of the time. I was cool with this, but I didn’t want to spend a ton of money every time nor did I want to drink every time.
This made things weird for us. We just had different goals. I would much rather save up for a trip than to go out every single weekend religiously.
I had to finally accept that we just had different goals. We still keep in touch. We just don’t go out every weekend.
I’ve since found friends with similar goals and plans for life. We have a ton of fun. We use our creativity to go out without spending money. We cook food. We don’t have to spend money on bottle service to have fun.
Keep the bigger picture in mind.
It’s far too easy to get distracted in life. Something always gets in the way. Expenses creep up. Wants become needs.
If you want to have fun while working towards financial freedom, you must remember the bigger picture.
What do you want more? What’s more important to you? Retiring in your 30’s or going out every Saturday night?
This will help you get through those days where you feel like you’re missing out. You’re not missing out. You’re not saying no. You’re just saying yes to the bigger picture.
Pick your battles.
There are some battles worth fighting for. Others that just aren’t.
I say that you watch the battles that you fight.
For example, you can’t always save money on everything. Sometimes you just have to find ways to make more money. You have to use your free time to increase your income. This will assist you in your steps towards financial freedom.
What battles are you going to fight?
Stay in shape!
Working out is good for the mind and the body. The process of sticking to a fitness routine will help you in other areas more than you could possibly imagine.
Hitting your workouts and always striving to eat well, you’re going to have other goals in mind. You’re not going to want to carelessly spending money on useless nights out and fast food when you know you shouldn’t be having it.
In my personal experiences, staying in shape has always kept me focused on my financial goals. They just go hand in hand.
That’s how you can have a ton of fun while working towards your financial freedom. Don’t get held back just because you thought you would be deprived if you tried saving a buck. If you want more, Root of Good has an amazing overview on retiring by 33 that you should check out.
Root of Good comments: Martin, you did a great job describing how to live a life that leads to wealth creation over time. Hanging out with people that share your goals and interests is a great way to prevent yourself from spending tons of money on things you don’t want to. Without really meaning to, I tend to spend more time with people that are interested in relatively low cost activities.
I like to have people over for lunches and dinners then hang out at our house afterward. I enjoy these get togethers, and I think my guests have a good time too. Since we have kids, a dinner out with another family could easily run $150-200 (a bottle of wine or two, maybe a few beers or cocktails plus dinner). Maybe I like peace and quiet, because I feel like many waitstaff “intrude” on our dinner party’s meal.
I remember fondly the days of hanging out as a broke high school and college student. Coffee shops, browsing used book stores, bowling, camping, video games, outside recreation, playing pool. Sometimes the best things in life are free. Or very cheap.
Martin mentions keeping the big picture in mind. To me, that means living the good life and not cutting your expenses to the bone to the point of extreme self deprivation. I’ll choose the less expensive option if two different things or activities will give me equal enjoyment. Martin says he would rather save up for a trip instead of going out every weekend. He’s been in Buenos Aires, Argentina for a few weeks living it up, and didn’t spend any more than the cost of a couple months worth of partying hard every weekend. And in the meantime, he’s enjoying a beautiful city and culture, seeing the sights and dining on fine food and drink literally half a world away from the U.S. All accomplished by simply making the conscious choice to focus his fun money on something really awesome instead of the mundane “get drunk and party every weekend”.
If you want to get a start on your next big trip, consider signing up for a credit card or three. You can get free flights and free hotels just for signing up for some credit cards and spending money on things you already buy. A couple of good cards for free travel are the Starwood American Express and the Citicards American Airlines card.
Martin asks: What’s the fun part of saving money for you?
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Thanks for allowing me to guest post Justin!
My pleasure! Good advice to help people balance living it up now with focusing on long term financial independence.
Nice article Martin!
As many have pointed out it makes perfect sense to choose the cheaper of two options if they will produce the same amount of enjoyment.
I have (close) friends that have almost completely the opposite mindset, I.e. they will deliberately pick the more expensive option due to it’s perceived greater value. It’s the definition of crazy to me. Sometimes (to me at least) the only perceived extra enjoyment they are getting out it is bragging to us about how much it cost.
It makes things awkward sometimes when we try to arrange things but we have taken the initiative to organise cheaper activities first and straight out spurning anything that is silly expensive that they organise. I think they perceive we are poor because of this but this is fine with me, I can almost assure you our net worth is greater (not that I’m getting into a d**k measuring competition!).
Picking your battles: with respect to the above, even though I personally completely disagree with that lifestyle, and drop the odd comment usually in a jovial sense (they do the same to us about ours!) I respect their choices, would not seriously challenge them on anything (it would be pointless anyway) and think we will remain good friends for a long time.
Anyway just my two pence /cents on the whole “only hang around with similar minded people” point.
The Rolls Royce spending model. If it’s more expensive, it must be better. I have overheard people, when facing a choice of something they have no clue on, actually state they want to buy the most expensive or next to most expensive option, and then say they have no idea what it really means or why it’s better. But hey, it’s more expensive so it must be better, right?
Bless these people. They will keep toiling forever to keep our economy going strong! And keep my investments paying solid dividends for years to come.
I was in the frame of mind where I thought it will always mean endless sacrifices just so I can save and be free of debts. That is until I chanced upon inspiring articles such as this one. They help in many ways to continue striving to reach a goal and feel less frustrated.
Getting wealthy is really a mindset. It doesn’t happen over night. It’s kind of like building a sand castle one grain of sand at a time. Even after a few months you might only have a small shapeless pile of sand. At some point you can start to see a defined structure, then it gets definition, and eventually it’s an awesome construct fit for a king!
That’s right, Jen: sacrifice doesn’t have to be linked to frugality. I practice “frugality without sacrifice” — which means optimizing my spending so that I save money while still getting what I was getting. Like switching from Sirius radio to free Pandora. Like switching from fee-based credit monitoring to free Credit Karma. Like switching stock brokers and saving over $1000 a year in commissions. And so on.
For me, the bottom line of that optimizing (so far) is to have what was an annual $24,000 core budget reduced to $18,000 — giving me an extra $6000 a year for fun stuff. Whohoo!
Good philosophy! I always think about how much some people pay for investment expenses. If we were oblivious to expenses, we might be losing $10,000 to $15,000 per year in unnecessary investment expenses (mutual fund fees and brokerage commissions). I actively look for ways to reduce the expenses we are paying. I figure we pay somewhere around $1,500 for management of our seven figure portfolio – and have investments all around the world.
I recently moved my 401k from my old employer (with a crappy 401k plan) to a Vanguard IRA. Expenses went from 0.21% to 0.05% on a $60,000 investment. That’s $100 per year in management fee savings in exchange for a 9 minute phone call to execute the rollover.
I also enjoy trying to find ways to cut expenses. It’s like a game to me to always try to optimize our budget and just be as efficient as possible. We don’t deprive ourselves either, I agree that saving money and being frugal is really just about your mindset. Rather than spend money eating out, I feel I can cultivate my inner chef by cooking at home. And it’s just healthier anyway.
One difficult area is the friends. We don’t have friends who have early retirement as a goal so it is sometimes challenging. But I believe we find a good balance, like inviting them over rather than going out. And sometimes, it is just nice to go out too!
Hey, that makes sense. Early retirement isn’t a goal for many. Some want to live as much as possible when they’re young and don’t care about retirement. I like to hear that you guys find balance.
Great post! It’s all about one’s mindset. Too many people look at the task of reaching financial freedom as hard and not fun. You have to track spending, save more, go without buying things, etc. But if you just change your mindset and find a way to make it fun – I like to make it a competition against myself – then it becomes very enjoyable.