Sleep-Well-at-Night Finances: Focus on These 3 Financial Areas and You're Golden
Sleep-Well-at-Night Finances: Focus on These 3 Financial Areas and You're Golden
Welcome to “Simple Finances,” a series of Tuesday essays about exactly that - simplifying your money. This is a paid subscriber-only essay. If you want in on the fun, subscribe here with a 7-day trial, free e-book, essays, and weekly waste-reducing recipes all for $5 a month / $50 a year. That’s just $0.32 - $0.38 per essay (and it could save you a damn sight more than that) ⬇
A few weeks ago I watched a friend (and globally renowned remote work expert) deliver a keynote at a digital nomad conference. Thus far, the event had focused on “how can we promote our country to attract digital nomads?” My friend had a different take.
She stood on that stage, looked one of the country’s ministers right in the eye, and slowly and clearly asked a single question.
If you haven’t even got good wifi, how the hell do you expect a single digital nomad to work from here?
As a digital nomad, if there is no wifi, there is no possibility of working. If there is no possibility of working, we won’t come to a country - and we certainly won’t stay.
As my friend said - you’ve gotta walk before you can run. Get those basics in order before you do anything else because otherwise, you’re dead in the water.
Basics are too often overlooked and yet they make the single biggest difference to pretty much anything in life, finances being no exception. We can try different budgeting tricks, we can cut out a coffee here or there, but if we’ve not taken care of the basics, it’s going to make next to no difference.
As I prepared for today's essay, I worried that this advice is too obvious - you may know it all already. But I want to repeat what many financial giants have said before me because the evidence would suggest that even if people know the basics, they’re not implementing them.
So if you implement them, your finances will be heads and shoulders above the rest.
***
Here’s the mic drop:
If you do not get your housing, transportation, and food expenditure in order, you’ll never achieve sleep-well-at-night finances.
These are the basics, the areas where almost all of us spend the majority of our money. Stats say the average is:
Housing: 30%
Transportation: 14%
Food: 13%
And if I was a betting woman, I would bet a lot that many of you are spending way more than that in each area.
It doesn’t help that society has decided that housing and transportation are not just a necessity but a signifier of how important you are in the world. Not only does that make them disgustingly overpriced (the fact that we allow people to profit in such obscene ways over life’s necessities is a crime IMO) but it also makes them status symbols. You’re not only sold to by marketers but also by society to part with more money than you really have for more space or car than you really need, all in the name of “you deserve it.”
When what you really deserve is to not worry about money every second of the day.
***
They may be basic costs but that doesn’t mean it’s a basic task to reduce them. Big wins = big commitment.
Food is the quickest win, so we’ll start there. As you’re paid subscribers, you’ll know that it’s a personal mission of mine to help reduce how much food we waste - it’s what we tackle every Wednesday here at Simple and Straightforward.
Sure, you could use discount or bulk supermarkets to try and get your food costs down. But the US wastes 40% of its food. Reduce that and potentially save up to 40% of your grocery bill right off the bat.
This means you can either save money or afford to spend on better quality ingredients, further helping the planet to not waste away under poor quality produce. Or both!
I hope Wednesday’s recipes are helping with this. You can also check out an old essay of mine:
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The other week I was watching the excellent YouTube channel Not Just Bikes. They said something that has been swimming around in my noggin ever since:
“Nobody should have to own a car in order to participate in society.”
Listen up, America.
73% of America’s population lives either rural or in the suburbs i.e. places where it is impossible to live without a car.
If you live elsewhere - particularly the European cities where I tend to hang out - a car is not necessary. My friends live in Berlin with kids and they still don’t own a car (and say they never will). But alas, I suspect a carless existence is not a possibility for many readers here.
I wholeheartedly agree with Not Just Bikes - it’s a sorry state of affairs we’ve gotten ourselves into if we have to own an expensive, temperamental hunk of metal just so we can buy our groceries, get our kids to school, do anything. But if that’s your reality, then at least you have the choice to make it as inexpensive as possible.
Smaller car payments. Secondhand cars. Take a leaf out of Georgia’s book (the country, not the state) where cars drive around with missing body parts because they simply don’t give an F about how they look.
Car payment figures are frankly terrifying. The average payment is $515-$667 - that’s a lot of moolah. SUVs account for 60% of car loans and those muthas are even more expensive.
Take it from this tiny-car-loving-European - cars don’t have to be big and expensive to fulfill their purpose. My own car was a second-hand Renault Clio. I owned it for 12 years and I ran a whole wine store on it (did you know you can fit 300 bottles of wine in the back of a Clio? Because I do…).
F**k the status - small, functional cars are cool. No car (if it’s possible for you) is even cooler. Unless you have a brood the size of a football team, small cars are where it’s at.
***
Finally, housing. The biggest and most emotionally charged of the three basic expenses.
I’m going to take a leaf out of my friend’s book here, look you dead in the eye and say:
If you don’t get the cost of your house in order, you’ll never achieve sleep-well-at-night finances.
Alas, there is no easy fix. If you rent, you’re at the mercy of your landlord and they’re not exactly known for offering reasonable rental prices. If you own, selling may not be viable or desirable. You may feel trapped.
But if you’re struggling with your housing costs, something has gotta give - there’s no way around it. Housing is the only place where magic savings can happen. Knock $500 per month off your rent for instance and save $6,000 a year.
That might mean getting creative.
It could mean moving cities, states or even countries. It could mean looking for a remote job so you can do that in the first place. It could mean moving into something. smaller. It could mean co-living or renting a spare room. It could mean staying where you are rather than moving up that housing ladder. Downsizing. Tiny house living.
There are thousands of ways, but it takes a mindset shift. Forgetting that old-school idea that the bigger the house, the happier you’ll be, instead, find what is the lowest you can go whilst still enjoying your life.
My friend Rocco Pendola calls it finding the floor:
How low can you go while still living a fun and comfortable life?
If you’ve got a hefty mortgage or close to it. If you’re paying absurd market rate rent or close to it. If you have too much car. If you’re living paycheck to paycheck, barely making ends meet. If you’re not among the super wealthy or filthy rich.
Find a way to find the floor.
How you do this is up to you and your specific situation. It may take time - a long time in some situations. But for the majority of people, it’s both possible and worth the effort.
Start with your housing and go from there.
***
None of this is easy. Life doesn’t make it so - the people around you even less so. And sometimes it feels like there’s no way out of big mortgages, big car payments, and huge food bills.
But there are always ways.
Listen to my keynote speaker friend - walk first, run later. The daily pumpkin spice lattes will take care of themselves if you get the Big Three in order first.
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This article is intended for information and entertainment purposes only and should not be considered investment or financial advice
“And if I was a betting woman, I would bet a lot that many of you are spending way more than that in each area.” Unfortunately you would be wrong. A more accurate thing to say..
“I would bet a lot that half of you are spending more than that in each area, and half of you are spending less than that in each area.” Such is the nature of averages.