I’m intrigued by the experience of a British woman, Michelle McGagh, who decided to stop spending money for a year on anything but essentials.
… in September 2013, my husband Frank and I bought a big ‘doer-upper’ house in north London with a hefty mortgage, in attempt to climb the property ladder. We couldn’t afford to keep on our old house as well as renovate so we put most of our possessions in storage.
For six months we lived on a building site while we replaced the electrics and plumbing, stripped the walls and extended the house. Trips to the storage unit were few and far between and I was surprised just how easy it was to live without most of my stuff.
It made me think about my outgoings (we had to tighten our belts now our mortgage repayments were higher) and reconsider which of my belongings I actually needed. Frank had been feeling overwhelmed by our sheer amount of stuff too, and over the next year we got rid of 80 per cent of our possessions. Crates of vintage dresses, 1950s and 1960s crockery, rugs, lamps, chairs, pictures were all sent to our local charity shop.
I started reading about minimalism on American websites and learnt about Buy Nothing Day, an anti-consumer movement, which falls on Black Friday, and encourages people to spend nothing on the most frenzied shopping day of the year.
It gave me an idea: I could easily manage a Buy Nothing Day but could I manage a Buy Nothing Year?
Spending nothing for a whole year would do wonders for my wallet and stop me from refilling my empty shelves with more possessions. It sounds extreme, but I’d set myself budgets and spending plans in the past and they’d always fallen by the wayside on my next night out.
A full year of no spending seemed the only way of resetting my relationship with money completely.
. . .
I totted up what I’d spent that year, compared to the previous one, and the result was extraordinary. I’d saved enough money over the year to pay £22,439 off my mortgage. I’m now a step closer to getting rid of our debt instead of being beholden to a bank.
. . .
One year on, I’ve reassessed my spending priorities and found a balance. I buy the essentials, put aside a little for holidays, pub trips and fun, but I’ve cut back on the takeaway coffees no end. Ultimately, those longer-term goals, security and the feeling of contentment with what I have are important to me and make me far happier than anything I can buy in the shops.
There’s more at the link.
Ms. McGagh has written a book about her experiences.
It’ll be available shortly in the USA, and is already available in the UK. Looks like it might be interesting.
Peter
I've lived like that by necessity, rarely by choice. Yes, there are rewards and I'm a lot more careful about how I spend my money these days, however the somewhat bohemian lifestyle isn't all that enjoyable to me.
Living within one's means is always a GOOD thing. Definitely worth looking into.
A key component to the Dave Ramsey program, he calls it scorched-earth. My wife and I lived like everybody else for most of a decade, making over a hundred and fifty thousand A year, had nothing to show for it.
When on this lady's plan for four years. Bought 4 rental houses for cash. It works.
You make a lot more money than you think you do. You waste a hell of a lot more money than you think you do. You will absolutely scare the hell out of yourself when you add up what you spend on coffees and in restaurants. For most people that don't have a retirement, the short answer is "they ate it."
Food for thought.
FormerFlyer
"That’s when I realised I had been going about the challenge all wrong. I’d been trying to live my old life for free. Instead I needed to embrace a different sort of social life."
That's definitely the key: we can choose to be happy or unhappy wherever we're at, but it really helps if we try to do enjoy something new instead of a pale imitation of what we gave up.
This is why I don't make "low carb pizza": every recipe I've tried falls short on the not-quite-the-real-thing, no matter how good it may be as a dish on its own. Far better to have poached eggs with hollandaise sauce on asparagus than eggs on "low carb toast".
This plan works exceptionally well. Right until it doesn't.
Minimalism is terrific for squirreling away money, but it eliminates necessary buffers. Circumstances (Venezuela, Argentina, Yugoslovakia, et al) predict that it's useful to have more than 1 roll of toilet paper in the house, or, for that matter, more than one package. Plus some food. And maybe some candles. perhaps some water, too, and maybe a little bit of ammunition with which one may protect that toilet paper, food and water.
There's certainly a difference between 3-5 packages of TP and 50, and buying life's staples instead of restaurant meals is a very reasonable trade. Not buying anything, however, and risking total dependence upon an uncaring bureaucracy hardly makes one into royalty.
Living within your means is a range of spending, not an absolute. Bracketed on one end is deficit spending, on the other is saving. Like most things there are extremes; hoarding and throwing everything out living in an empty room. Both afflictions seem rather more common in women than men, although that isnt supportable by any facts I have seen.
"waste" is subjective…
William Morris had as good a definition as anyone- Something to the effect of limiting your possessions to that which is either useful, or beautiful, or both.
( Colt 1911 fits both categories. Glocks fit one… I am reminded of L.Francis Herreshoff's remark on fiberglass boats "they look like frozen snot")
Tools good, fine art and antiques good, cheesy chinese gimcracks and fad toys (beanie babies, etc) a waste. (to me) But any episode of Antiques Roadshow will find a mass produced teddy bear or doll, valued as much or more than a fine antique that took a thousand times more effort and material cost to create. One measure I like to apply is to ask, if this item was being manufactured today, to the same standard, what would it cost? What relationship would that cost be to the value it brings as an "antique"?
I do know people who have spent tens of thousands on cheap mass produced memorabilia and fad items, and do not have a tool or weapon in the house. Sort of frightening, really. The sort of stuff that goodwill stores and landfills will be filled with.
And books…let's just not go here…!
I once owned a 4 bedroom house in Encinitas. When she left with what she wanted and all that I wanted I had a houseful of stuff. I stored it for a year or two and then gave the chaplain a call and asked him if he could take two Pods full of stuff and use them for the ministry, himself or his friends and shed the lot. I stepped outside one day and realized, like Socrates at the the fair, how much stuff there was out there that I didn't need….or want. Everything I wanted fit into a VW Jetta and that included the swords and guns and a uniform to be buried in. It's funny how little material one needs day to day or month to month.
We're not talking preparedness. We're still plenty prepared, we just don't need 45 chairs, 36 table lamps, etc. Books, they come, in their thousands in e formats that work very well on sony, kindle and computers with calibre.
So I have to wonder; did they really NEED the new house?
She saved over $27,000 in a year by living frugally? What in the world had they been buying? I bought some tools I discovered I didn't need last year but that didn't come to $250. How in the world does someone spend $27,000 beyond basic expenses in a year without major medical bills? Wife and I just don't have enough imagination.
I tend to keep whatever "stuff" I have because I just can't go out and buy more "stuff" if I need it. For instance I have 4 lamps in my basement carefully stored. De-cluttering proponents would say throw them out you don't need them. Thing is, when my bedroom lamp dies, and it's on borrowed time after the last repair, I just can't afford to go buy another. The 50 bucks I might spend on a lamp would be much better spent on the electric bill, medicine or food or set back for the never ending bleeding of taxes. Maybe it's from my depression era parents drumming frugality and not wasting what you already have. Maybe it's my own meager financial hand I've been dealt through no fault of my own (serious crippling injury). But I have trouble throwing usable things away. I'm no hoarder but I have need of those boxes of seemingly unneeded items I own. They're irreplaceable or only replaceable through great sacrifice and I will need them some day.
I often listen to Dave Ramsey in the car (96 with 400,000 miles btw) and there are seemingly intelligent people like doctors and high IQ required professionals or other people who are making hundreds of thousands a year in mountains of debt or living paycheck to paycheck. Those people boggle my mind. There's a very politically incorrect name we use around these parts for people like that. I just can't muster any sympathy for them. You make in a month what I make in a year or more and you're strapped for cash? FU. When I made a middle class income I lived below my means, stayed away from debt and paid cash for major purchases like vehicles. I'm actually quite good with money I just can't generate enough of it given my circumstances. I'm not complaining mind you, but don't expect me to feel much empathy when you're netting 100k a year after taxes and just can't seem make it.
I guess she never heard of Dave Ramsey
If "minimalism" becomes the new norm what will the advertisers and corporations do for employment?
90% of the commercials on television are for brand-new motor vehicles, home furniture, cable/satellite TV-and-internet services, and high-tech gadgets.
I find it really interesting that we've never spent more than ~$20,000 for a car, and generally less. We like reliable, comfortable, vehicles but neither one of us is a car nut, so we generally buy a recent-model used car, maintain it well, and keep it as long as it's reliable.
But some of our friends and family complain about being strapped for cash while buying (every 3-5 years) new luxury cars or full-sized pickups (that never go off road, pull a load, and have a single load of cargo in the bed once or twice a year).
Ditto for other lifestyle choices – we go out to eat regularly, but it's a treat, not an automatic choice. We buy good quality clothing, but don't worry about the fashion of the minute (and prefer to wait for sales, and are quite happy if we find what we want on a discount rack or – score! – at the charity thrift shop where my wife volunteers.)
In other words, we try to live like I remember my parents and grandparents living – buy what we need, budget in savings to cover emergencies, and then split anything over that between long-term savings and identified-as-such luxuries. This isn't exactly hair-shirt privation – we've everything we need and most things we want. All the same, our spending level still runs well below most of our friends and family.
But they think we're "rich" because we could get our kids through college without student loans (until graduate school – we only covered living expenses there), we're paying our mortgage down early, and we're putting money into our retirement savings, and think we're "cheap" because we're careful about our spending. They don't even realize that until you're in the top-1-percent income group (probably even there) there's a correlation between "cheap" and "rich".
She and her husband are clearly minted anyway, with lucrative jobs: many people in the UK don't earn £22K.