Money and debt are among the main reasons why we keep doing what we do and not what we like to do or do what we dream about. The personal environment, the advertising and the media tell us that we can only take part of society if we spend a lot and own a lot. Nowadays, it is easy to live from monthly salary to monthly salary or equally to live on credit. Credit card payments are debited only after weeks, the current account has a credit-line, as well as more and more products are offered with a 0-percent financing and a loan is long gone without credit information.
Such a lifestyle can trigger feelings such as stress, anxiety, frustration and helplessness. Being permanently exposed to them has almost always a negative impact on physical and mental health.
There is a way out of this vicious circle. This way is in my experience the best financial tip that you can get and at the same time a wisdom of life:
Live under your circumstances!
That means nothing else than spending less money than taking in.
There are two screws available for you. Either you earn more or you spend less. I recommend focusing on consuming less. A higher salary usually means more work and stress. Moreover, it rarely leads to a higher savings rate.
If you live under your circumstances, means that you spend less than you earn, and you will benefit from it on the long run. You will gain financial and personal freedom. There will be more options for you opening-up. You will feel more self-confident, balanced and happy.
Even if you only pay $50 a month, sooner or later you will be debt free and you will build up a financial cushion. Consider the monthly amount not as a savings, but as an investment in you and your future self. Find your mix of call money, time deposits, equity funds and other forms of investment that suits you and your life situation.
Since I can think, I always tried to live under my circumstances. So it was possible for me to realize dreams. As a student, I was able to buy me the tech I wanted. And I traveled through Europe every weekend for weeks with the Inter-Rail ticket. At the age of Mid-30, I traveled around South-East Asia for a year and a half. Five years ago, I quit my day-job to follow my calling as a freelance writer. Since then, I’ve spent many weeks traveling on long-distance hikes. And in the summer of 2020 I plan to go on a trekking tour around the world by foot.
Of course, there are circumstances in which you spend more than you take in for a certain amount of time. This is usually the case when you receive no or only a small salary, for example because you are still in training, as I also worked as voluntary on animal sanctuaries I took a longer break from mid-30, from self-employment and in between for health reasons the breaks were even shorter. Such phases are much easier to survive with savings or even possible if you have saved money on the side. In order to be able to afford such a thing in the double sense, one should already have lived under the circumstances.
Now you may wonder if a purchase on credit would not make more sense, at least for your own property. That should be considered carefully. I can not imagine that for myself. I grew up in a house that had to be paid off for many years and have some friends who do the same. So I know the restrictions very well. Many are unaware of what they are getting involved with and what the permanent burden of debt is. Those who honestly discovers this, will find out if their own four walls are really a lifelong dream and not just a figment of their imagination.
How to live concretely under this circumstances should not be the part of this blog but rather of another one about the Frugalist movement. But of course, minimalism is an essential part of the path to personal and financial freedom. Minimalism also means spending only money on things that you really need and that make your life easier or better.