There is much about our financial system that is way too complicated for me. I’ve put a lot of effort into making my life simple and peaceful so the last thing I want to do is spend my precious free time trying to maneuver my way though mountains of banking statements, stock reports, credit card bills, and insurance papers. No thank-you! Life is complicated enough. I don’t need any further aggravations competing for my attention.

I watched a friend go through the process of buying a house several years ago and to be quite honest the whole ordeal made me nauseous. I remember thinking there has got to be a better way to make this kind of transaction that doesn’t require the talents of a three ring circus. In 2003, I bought a car. You have never seen such a fiasco with negotiating the price not to mention the stack of papers that were put in front of me. To this day I’m still not completely sure what I signed. I hope no one ever comes forward to claim my first born child because I have no one to offer!

Our monetary system and financial markets really get off on making things complicated. Derivatives anyone? But could it also be that humans have a tendency to make things difficult when they don’t have to be that way? We may complain about the complexities of our finances but for the most part we go right along with all the insanity and rarely demand for anything to change. Maybe our financial lives mirror our personal lives. We are so used to clutter and difficulties that we accept the ridiculousness of our personal finances without question. Something to think about, huh?

We may not be able to 100% completely get away from all the complexities of modern finances but we can take some steps to make our own finances as simple as possible.

I’m a big fan of automatic payments. Just make sure you have the money in your account when the bill comes due or your life will be anything but simple. It takes a little time in the beginning to set up but once it’s in place, you no longer have to remember to write out the check, buy stamps, go to the post office, and all the other hassles that come with paying bills.

Simplify any other bill paying that you can’t automatically deduct from your checking account. Depending on your needs, set aside one day each month or each week to take care of any other bills that need to be paid. Set up a folder with your bills and any other materials you need such as stamps, checkbook, envelopes, calculator, pen, etc.. This way everything is in one place and you don’t waste time looking for your checkbook or trying to find a stamp.

Get out of debt. I can’t tell you how liberating it feels to be out of consumer debt. If spending is a problem for you, focus on how great you will feel when you no longer owe anyone any money. Think how wonderful it will feel when you are not wasting energy trying to figure out how you will pay your debts. Don’t be afraid to get the support of a counselor or group. There are others who struggle with overspending so why not take advantage of the resources that are out there to help you achieve financial freedom.

Downsize to one or two credit cards. Why anyone needs multiple credit cards is beyond me. I’m sure there is the rare individual who needs 13 cards but most of us can get by with just one or two. One credit card statement and one bill to pay each month are so much easier. You have to keep a really close eye on the credit card companies to make sure your statements are accurate and you haven’t been overcharged. It’s easier to do this with one or two instead of having to police multiple statements each month.

Start working on your taxes in January. Don’t wait until the night before you visit your accountant on April 13 to start getting your receipts and payroll statements together. Start early. You will feel so much better and you won’t feel rushed.

Put your tax receipts in a special place each month. I’m currently a 1099 employee so I have to keep up with a lot of receipts and mileage. I have a special notebook set up with pockets for each month. At the end of each day, if I have a receipt I file it away in the notebook. If I’ve done any work related driving, I immediately log it onto my spread sheet. It becomes part of my daily routine and I’m not  panicking when I do my taxes the following year because I can’t remember how much I drove or where I put a certain receipt.

Consolidate as many of your accounts as possible. I’m a big fan of credit unions as most of them are more personable and less bureaucratic than the big banks. I have my checking, savings, and money market at the same credit union. There’s one statement (I get it via email) and I can easily transfer money from account to account on-line if I ever need to do so. I also have consolidated my investment accounts with the same company. Again, this makes it easier to monitor and know what I have.

Eliminate paper clutter by getting as many of your statements and bills as possible via email. I don’t like having a bunch of paper cluttering up my file drawers so I save my electronic statements to my computer. Make sure you organize them by month and year for easy finding if you ever need to look something up.

Rethink your need for certain kinds of insurance or any other protections that promise security but actually end up complicating your life. There are a lot of companies out there that will sell you insurance for just about anything. I’m not going to tell you what insurance you need and what you don’t need because that is up to you. I can however say that we don’t need to insure every single thing in our lives.

Purge whatever financial statements you can. Unless I will ever need it for tax purposes, I don’t save every financial statement that I’ve ever received. Every year, I go through any loose papers I have and throw them away. Check with your accountant about what you need to save and what you can throw away.

Have as few financial obligations as possible. I have reduced my need for multiple goods and services over the years. One of the many positive things about this is I have one less bill to pay for each good or service I choose to eliminate. No bills for magazines or the newspaper. I don’t have to write out a check to the maid or the gardener. There’s no cable company to pay and no water delivery service either. I don’t have to budget money for pedicures, manicures, or someone to wash my car because I do it all myself.

Ask yourself is it going to simplify or complicate your life? Ask this question before committing to any purchase, major or small. Will you have to insure it? Will you have to go in debt for it and if so for how long? How much will it cost to maintain it? Do you have to pay taxes on it each year? Do you have room for it? Know what you are getting into with each and every purchase you make. This way there are no surprises and you can choose if it’s worth the investment of your time and money.

(If you’d like to read more about changing the way you think about wealth please consider reading my book REDEFINING THE MEANING OF WEALTH: DISCOVERING PROSPERITY AND FORTUNE IN THE UNEMPLOYMENT LINE.)

Big Bear, CA

Several weeks ago U.S. News and World Report featured an article titled “15 Things You Shouldn’t be Paying For”. I highly recommend it. Free computer software, drinking tap water, fee-free checking accounts, adopting animals from a shelter instead of buying from a breeder, obtaining books from the local library, and lots of other great ideas are discussed. Check out the article and see if any of the ideas resonate with you. 

Too often we blame high costs as the reason we are broke or can’t afford something. But if we are willing to shift some habits and in some cases trade our time for money, we can keep more of our hard earned cash. Somewhere along the way we have all been brainwashed into thinking expensive goods and services have more value than something that costs very little or better yet is free. Even though many expenses are beyond our control like healthcare (please don’t get me started!) there are still many things we can get for free or for very little money. I share some of my own ideas below:

• Why spend money on cable? Stream your favorite programs from the web.    Check out Hulu (great for TV shows)  or Crackle ( great for movies)

• Wash your own car instead of paying someone to do it. The summer months are a great time to play in the water and get a little sun. Washing your car is also good exercise.

• Read your favorite magazines and newspapers on line and cancel your subscriptions. This option also cuts down on clutter.

• Craving new clothes? Shop in your closet. I guarantee you’ll find at least one treasure you forgot you had.

• Entertain at home. Next time you get the urge to get together with friends and go out to eat, why not invite them to your home? Sure eating out is about the food but it’s also about the company. You can just as easily socialize with friends at home as you can at the latest trendy restaurant.

• Never pay for a credit report. Check out the Federal Trade Commission’s website for more info: http://www.ftc.gov/freereports

• Have you been thinking about buying an e-book reader but you’re not sure you want to delve out the money just yet? Amazon has a free kindle you can download to your computer. It’s a great way to check out this fun new technology before you take the plunge and buy one separately. Who knows, you may even find out that you enjoy reading books on your desktop or laptop. Many e-books are cheaper than regular books and Amazon also has free books you can download.

• Trade pet sitting services with a friend. Our pets are like family and we want them to have the best care possible when we are away from home. Team up with a friend or a good neighbor and help each other out when pet care is needed. The pets will come to know these sitters as family and won’t be so freaked out when their people are away.

• Vacation at home. Stay at home and be lazy. Better yet, be a tourist in your own town. Nobody loves traveling more than me but sometimes it’s nice to vacation at home especially if funds are tight.

• Send e-cards for special occasions. Many sites offer them for free and they are a great way to cut down on environmental waste as well.

• Don’t buy water at the airport. We all know that we can’t take liquids through airport security anymore but that doesn’t mean you have to pay for bottled water once inside the terminal. On a recent flight, I gulped down my last drop of water as I reached Security and the TSA guy encouraged me to save my bottle and fill it up once I passed the security checkpoint. What a brilliant idea, I told him. In the future, I plan on taking an empty water bottle and filling it up at one of the filtered water fountains that all airport terminals provide.

• Bring your own food to the airport. With the exception of some fruits and vegetables, most food is allowed through security checkpoints. Of course it may not be practical to pack a gourmet meal but snacks brought from home are much cheaper than buying them from the high priced eateries at the airport. I like to pack trail mix, dried fruit, blue corn tortilla chips, and dark chocolate.

• Can you borrow it? If you only need an item temporarily, why not borrow from a friend or relative? Offer to return the favor in the future with anything they might need as well. Appliances, tools, clothes, suitcases, serving trays and dishes are great examples of items we can borrow from each other.

• There is never any need to buy gift wrapping. Use an old brown grocery bag and decorate with markers, stickers, and ribbons you have laying around. Reuse gift bags. Just remember to remove any gift tags and make a new one. If you absolutely must buy gift wrapping, tissue paper is the cheapest.

• Entertain yourself for free. The web offers hours of free entertainment. U-Tube alone can keep one engaged for hours with music, crazy pet videos, and special interest stories. Check out your library or community centers for free lectures and concerts. Don’t forget enjoying nature. It’s truly the best show in town. Quit using the excuse that you don’t have money for entertainment. There’s plenty out there if you just look for it.

For me saving money is about freedom and taking control of my life. It’s not about being cheap or trying to get something for nothing. Saving more gives me the freedom to possibly work less, have an emergency fund (which gives me peace of mind) or spend my money on a really cool item or experience such as traveling. What about you? Why do you like to save money and do you have any ideas to add to the list above?

Sunset over Redondo Beach, CA

Anything simple always interests me.  ~David Hockney

For those of you who aren’t familiar with the The Simple Living Network, I highly recommend you take some time to check out this great site. You won’t regret it. If the idea of slowing down and simplifying your life is appealing to you, the wonderful resources on the The Simple Living Network will help you do just that!

I came across this site several years ago and have found the articles, book recommendations, and links to other resources invaluable. After hiding in the background for several years, I recently took the plunge and joined the discussion forums and I’m having a blast. It’s a great community and so inspiring. I love knowing there are others
out there like me because it helps keep me focused and on track.

Now don’t confuse simple living with poverty or deprivation. Simple living is a lifestyle choice that allows a richer inner life through a simpler outer life. Like wealth, simple living can have many definitions as well. There are no rules when it comes to living simply. One person’s idea of simple living might be to pare down to as few possessions as possible while another person’s definition  might be planting a food garden in their backyard.

My personal definition of simple living is cutting out the things in my life that no longer serve me or the greater good of the planet. By keeping it simple, I stay focused on those things that enhance my life the most. I’m also much more mindful of my consumer choices and how they affect the environment, because I want to do my part in treating Mother Nature the way a lady should be treated.

Before I was introduced to the concepts of simple living, I always felt disorganized and rushed. It seemed like I never had any quality time to myself.  Being the ultimate people pleaser, I was always accepting invitations out of obligation when what I really yearned for was a few quiet moments alone to reflect and regroup.  I was always on the go and never able to fully enjoy the present moment. Then one day while browsing in Border’s bookstore on my lunch break, I found a book called Simplify Your Life by Elaine St. James. I found the whole concept of voluntary simplicity fascinating. Hungry for more ammunition to help me in my quest to take back my life, I started surfing the web for more information and that’s when I found The Simple Living Network.

Since I have begun this path, some of my results are as follows:

No Debt- One of the ways I did this was by taking the bus to work and freeing up the money I would have spent on gas and parking to pay off bills. Our household has still managed to remain debt free (with the exception of a car repair bill I blogged about a few months ago, but hey that’s almost paid off, thanks to simple living principles!)

More Time for my Interests-One example is Yoga. It’s my passion and I practice several times a week. It’s my priority so it takes precedence over shopping at the mall, attending social events I have no interest in, and lounging on the couch watching reality TV.

Quality Time with my Husband-My husband and I keep our calendars very simple so we can spend time with each other. We like hanging out together which is one of the reasons we got married! Our favorite time of the week is Friday night. We order take-out from our favorite neighborhood restaurant and watch paranormal or crime documentaries.  (Yes, we’re a bit twisted! )

Quality Time with Friends-Since I have cut back on activities I have no interest in, I have more time to hang out with my friends and family. We don’t have to go to a fancy restaurant or over-priced concert. I can have just as much fun going out for coffee, taking a hike together, or sharing a bottle of wine while sitting on my front porch.

Massive De-cluttering- I have thrown out so much junk over the last few years. I still think I have too much but it’s nothing like it used to be. Now that I have less, I can  now more fully enjoy what I do have.

Respect for the Environment-I have never been against protecting the environment but I used to think it was something I had no control over. I now know different. Each of us can make a difference. Owning a fuel efficient car, choosing walking over driving when it’s feasible, and recycling, are just a few of the many positive habits I have developed which are helping me lessen my footprint on the world.

A More Creative Life-I no longer feel I have to live life a certain way. I can create the life that works best for me and not what advertisers or the status-quo say are best.

I’m still simplifying my life. It’s a constant journey and I’m loving every minute of it.

One of my frugal finds-Beautiful silk flowers I found on the street

“By sowing frugality we reap liberty, a golden harvest.” –Agesilaus

Redefining Wealth requires a mindset change. Saving money through frugality is one of the many practices that can help us redefine what “wealth” means. Little by little frugality is making its way into the mainstream, but in my opinion it still has a long way to go.  Too many people still see frugality as deprivation and drudgery, not to mention un-hip, cheap, and damaging to the economy.  I always find the latter reason especially amusing since out of control spending is one of the reasons the economy is in such distress.

I’m still a work in progress when it comes to curbing my spending and being mindful of what I buy.   Below are some strategies I’m using as I strive to change my mindset, adjust to a reduced income, and redefine what wealth means to me.

• Is it a want or a need? This is a basic Savings/Frugality 101 principle but it’s a great question to ask before you make a purchase.  If I’m looking to buy ingredients to make a salad or replace worn out undergarments, then the purchase is a need. (And of course, I always shop around for the best deal on necessities). If it’s a cute blouse I see on sale, then that’s definitely a want, because I already have dozens of “cute” blouses in my closet.

• When I come across an item that is a want and I’m ready to cave in to the temptation, I ask myself the following question-what do I really want?   Like everyone, I want love, happiness, acceptance, respect, and meaning in my life.  I don’t need the latest Prada bag or flat screen TV to experience these things. When I can analyze the missing need in my life, I often find I don’t even want the item in question anymore.

• I’m learning to analyze the advertising around me.  I recently came very close to buying a night cream that promised a vibrant new youthful complexion with only a few applications. It suddenly occurred to me that if this product made you look as young as it claimed, then the whole plastic surgery industry would be out of business.  Last I checked that industry is still thriving.

• There’s nothing wrong with buying used, finding things on the street that people are throwing away or asking around to see if someone is getting rid of  something you need. I recently mentioned to a friend that my Bluetooth was falling apart. Lo and behold she said she had an extra one she wasn’t using and I could have it.

Looking for ways to save money can be fun and creative.  It’s also great for the environment because we don’t consume more than we need. I find that when I approach saving money as a positive endeavor and not some kind of death sentence, then I’m much more successful, not to mention happy.

]]> http://redefiningthemeaningofwealth.com/2010/01/18/redefining-wealth-through-frugality/feed/ 0 http://redefiningthemeaningofwealth.com/2010/01/04/investment-advice-for-2010/ http://redefiningthemeaningofwealth.com/2010/01/04/investment-advice-for-2010/#comments Mon, 04 Jan 2010 22:16:42 +0000 Paige http://redefiningthemeaningofwealth.com/?p=268

Another beautiful winter day in Venice Beach, CA

Happy New Year Everyone! I’m looking forward to a prosperous 2010 for all of us. Speaking of prosperity, I have a great investment tip I’d like to share. Now, I don’t in any way shape or form claim to be a finance guru, but I do think my advice will give you some great returns. Invest in your health this upcoming year and every year after that as well. There’s no better place to put your time or money than in one of your most precious assets-your health and well being.

As I reflect back over the past year, I’m particularly thankful for good health once again. Yes, I may be unemployed and have added zilch to my net worth, but I sure do feel great. It may sound corny, but not a day goes by that I don’t acknowledge and thank God for giving me yet another day of well being. Besides, what good is any worldly wealth if you feel sick and run-down?

I’m an avid yoga practitioner (Iyengar yoga to be exact) and I attend a class almost every day. If I can’t make a class, then I can be found practicing in the middle of my living room floor. I roll out the yoga mat, my feline companions Shylo and Hunter take their respective places on my mat, and I use what little room is left to stretch out into down dog or go up into headstand.  Yoga has been a great investment for me physically, mentally, and spiritually. I especially love how it has made my mind flexible and much more open to the world around me.

Investing time and money into yoga has been one of the best investments I have ever made. So when my yoga studio membership fee came due several weeks ago, I did not hesitate at plopping down $650 for unlimited yoga classes for the next 6 months. Some people might think this is a crazy thing to spend money on when you don’t have a job, but it would be even crazier for me not to do so. Instead of hitting the mall with some of the Christmas money my parents gave me, I’m hitting the yoga studio instead.  I can’t think of a better thing to spend money on than something that I love doing, keeps me healthy, and is loads of fun!

Hunter and Shylo - two of my most non-toxic assets

The term “toxic asset” entered the cultural lexicon during the recent financial debacle. In a nutshell, toxic assets are financial assets that can no longer be sold at a reasonable price because their value has fallen substantially. One can sell them at a loss or just let them sit and pray that they will eventually go up in value. Most people want to get rid of them as fast as they can so they don’t fall too far down the financial abyss. This is probably the smartest thing to do since they probably will only continue to drag you down if you don’t trash them as soon as possible.

In addition to the financial toxic assets you may have, did you ever stop and think about the other types of toxic assets in your life?  Our over extended finances and bad money habits are not the only toxic game in town. Maybe you have relationships that no longer nurture you or you have a life extracting job.  Material possessions you no longer need or that cost too much to maintain can also deplete your life energy. Organizations you belong to that take up too much time and no longer feed you can be toxic as well.

Toxic assets are not always external factors. Our own judgments and narrow points of views can be poisonous to our psyches as well. As I begin to clear out the toxic assets in my life, I’m making it a point to pay attention to the opinions I have about the things that no longer serve me. If I choose to rid myself of something, I can do so without feeling guilty or like I need to justify my decision. Self doubt, judgment, and being too hard on ourselves serve no positive purpose. If something or someone is not enhancing your life, chances are they never will.

I’m shedding many toxic things in my life right now. It’s easy to lament the wasted time I’ve spent on these bad investments, but instead I’m focusing on the self respect and peace of mind I’m gaining. Maybe life was not meant to be as hard and complex as I often make it. Maybe it can be somewhat easier when I eliminate all that no longer has value for me. By ridding myself of these things, I make room for life to be easier and more fulfilling.  I can then let go and allow into my life exactly what I need. Who knows what that will be, but it will be fun to find out. We’ll see!