There’s a thought that’s been bouncing around my head the past couple days that I’d like to get some opinions on: Spending a small fraction of our income isn’t limiting; to the contrary, it’s liberating.
My fiancée and I were talking with friends Monday night about our finances and it came up that we spend less than 40 percent of our take-home.
You wouldn’t believe the reactions we got (Or maybe you would?) — there were variations of “You have to live a little or you’ll be unhappy!” or “Why limit yourself while you’re young?”
The thing is though, we’re pretty happy with our lives. We travel, eat healthy food, and are never wanting for entertainment. Not only that, spending a small percentage of our income adds to that happiness rather than takes away from it. Here are some reasons:
- It changes our relationship with emergencies. When we’re surprised with unexpected expenses, we’re less stressed because we know we can just slow down our savings to pay for them without dipping into our emergency fund.
- It changes our relationship with buying stuff to keep up with friends. When we see them with the newest phones, brand-name gear, etc., knowing we could afford them — but simply choose not to — is surprisingly good at getting rid of the temptation. Also, it makes us covet what they have less.
- It changes our relationship with work. This might be the biggest one. We have friends whose monthly expenses — mostly rent and going out — are so high that they couldn’t possibly switch to a lower paying job. Yes, currently, both my fiancée and I do work that feels fulfilling and meaningful, but it’s very empowering to know that we could choose to switch jobs if we decide we want to try something different — even if it pays less.
We’re definitely far away from being completely financially independent, but our limited spending sure does make us feel a little more free 🙂