I have found that when someone meets a person who saves +50% of their income there is usually a statement made along the lines of, “That’s great, I wish I could do that.” Due to our societal hangups with talking about money, the conversation usually is not pressed as to why they could not, but I bet the person’s thinking goes something along the lines of, “How can people who are saving +50% of their income be happy. They must be so deprived. I want to be able to enjoy my life.” The sad part is the people who are ‘enjoying’ their life are usually stressed out and overwhelmed and using ‘enjoying,’ aka buying things, as a way to try to compensate for this. I would posit that the person saving +50% is actually truly enjoying their life.
I have personally found in my life that as my savings rate has grown, my enjoyment of life has grown, and I believe there are two main reasons for this. The first is that I have removed unnecessary expenses and truthfully just the unnecessary from my life and the second is that in removing these things, plus implementing a few other principles, I have gotten closer to optimizing my life.
Merriam-Websters Dictionary defines optimize as: to make as perfect, effective, or functional as possible.
Thousands of books have been written on how to optimize ones life, but I would postulate that the FI community has found one of the best ways to optimize ones life and it starts with optimizing ones financial picture. As they sing about in the musical Cabaret, “Money makes the world go around, the world go around, the world go around…” If you make what makes the world go around, “as perfect, effective and functional as possible,” by default the world is going to be doing pretty good as well. Or taking it to personal scale, if you get your finances and financial picture optimized, your life will go around much better as well.
One of the greatest ways I have found to optimize my financial picture is to automate it. To this day my Apple calendar still comes up with alerts that I set many years ago reminding me to pay X credit card on a certain day of the month. Back when I used this system it was stressful as I would have to find time in my day, while trying to get a show loaded in, run, and loaded out to log into my account and see the amount of the bill, log into my bank account and assure the money was in my checking account, and then log back into my credit card account to pay my bill. A few times I would get so busy that I would completely forget to pay the bill and be hit with a late fee which added increased stress. Setting up automatic debit from my bank account on the day the bill is due has removed a huge weight from my shoulders. Now, I log into my Mint account (a personal finance app) near the beginning of each month and write down the statement balance of each card, in the spreadsheet where I track my savings rate, and then check my Personal Capital app to make sure that amount of money is in my checking account. What used to be spread out over multiple days and take at least 10-20 minutes each of those days is now done at one time and takes less than 10 minutes once a month. Optimized.
Similarly, I have automatic debits set up on various pay days of the month to go into my 401K, my taxable investment account, as well as other investment accounts. Having the money debit on pay day eliminates the stress/temptation to spend it over investing it. This automatic debit also gives me the peace of mind that I will have money in my retirement, while requiring no effort on my part minus the initial setup. In effect I have made my finances run smoother by removing myself from the process, thereby freeing up time to enjoy my life as I see fit.
P.S. I have added a resources section to the blog that you can find in the header where I will place books, podcasts, blogs, and other material that I have found helpful on my journey to financial independence.
