Become a Financial Superstar

Take these tips from everyday people who took on impressive – if not, seemingly impossible – financial challenges, and be inspired to think differently about your money.

Portrait of Tammy Strobel

Take these tips from everyday people who took on impressive – if not, seemingly impossible – financial challenges, and be inspired to think differently about your money.

Text Laura Shin/Forbes.com/Featurewell Photo Corbis
Text Laura Shin/Forbes.com/Featurewell Photo Corbis

One pair of roommates embarked on a project they titled the Buy Nothing Year. One couple minimised their housing, transportation and grocery expenses and bought little else until they were able to retire in their 30s. One man gave up a salary of US$150,000 (S$203,677) and now travels the world on less than US$30,000 a year.

The stories astound from a sheer practical perspective and while many of them employed the same tactics – cycling instead of driving, cooking at home rather than eating out, choosing inexpensive investments and minimising taxes – what kept them on their path tends to be more individual and unique.

Here are some mental (because the first hurdle is always psychological) tips you can pick up from these everyday financial superstars, who haven’t done anything more special than you and me – except to think differently about their money.

STOP THINKING OF SAVING MONEY AS DEPRIVING YOURSELF
blogger Mr Money Mustache, who retired at 30, says: “You’re actually buying yourself the most valuable thing you can: your freedom. So if you say, ‘I like spending my money – on my freedom’, it gets you excited about saving again.”

“With that money comes freedom and opportunities,” says Geoffrey Szuszkiewicz, one half of the Canadian roommate pair that embarked on the Buy Nothing Year, in which he and his roommate Julie Phillips stopped spending on consumer items such as clothing and electronics, as well as services such as haircuts, dining out and even petrol.

BE CLEAR ABOUT YOUR GOALS
Don’t embark on new financial habits just because you know you should. They won’t stick. “Saying ‘I want to save 20 per cent’ doesn’t mean anything,” says Cait Flanders, Blonde on a Budget blogger, who lived on just 51 per cent of her income for a year. “Why do you want to save money? Make sure your entire budget is wrapped around your goals, not just what you think you should be doing.”

LIVE BY GUIDELINES, NOT BY RIGID RULES
Says Julie of the Buy Nothing Year pair: “Geoffrey has a background in psychology, so we used a model called acceptance and commitment therapy, where you commit to something but accept that you’re human and you’ll make mistakes.”

So, Julie and Geoffrey allowed for conscious cheats. “There were days when it was below 4 deg C and I had had a really bad day, so I would just order a pizza,” she adds.

DON’T BE AFRAID TO SUGGEST CHEAPER SOCIAL ALTERNATIVES
“I didn’t have a problem saying to people: ‘Let’s do something at your house instead’, or ‘Let’s have a barbecue’,” says Cait. “Once you suggest it, it’s surprising how many people will agree with you because, honestly, most people can’t go out as much as they think they can. They’re also thinking, yes, it would cost $5 or $10, instead of $30 to go out.”

VALUE TIME AS MUCH AS MONEY
Colin Wright seemed to be living the life: He was running a branding studio in Los Angeles in the United States, living in a nice apartment and earning US$150,000 a year.

But he was also working 100-hour weeks. On his first trip outside the country, he remembered that he’d always wanted to travel. Although he was soon offered a much more lucrative job, he declined it and decided to live on the road.

“I was 24 at the time, looking at the rest of my 20s, thinking, ‘I can always make more money, but I can’t get my 20s back. I cannot get more time, no matter how much money I have,’” he says. Now, he travels the world on less than US$30,000 a year.

FIND FRIENDS WHO SHARE YOUR VALUES
For some of these super savers, their choices did not affect their social lives much. For others, it had a big impact. For instance, Mr Money Mustache says: “We generally did the same things as our friends – hosting parties, camping and mountain bike rides, snowboarding, and working a lot.”

The difference was mainly in hidden wastes. “I would keep my older car instead of upgrading to a new one bought on credit. Maybe enjoy some wine on Friday night rather than going downtown for expensive drinks. Cut my own lawn instead of hiring a service company,” he says.

But the Buy Nothing Year pair went through a period of adjustment. “Not all of our peers signed up for it. They were inviting us to things that cost money and slightly guilting us too – ‘It sucks, I haven’t seen you in so long,’ they’d say.

“So there were times when I felt out of sync with my own life, and lonely,” says Geoffrey. Eventually, their new lifestyle made them new friends in the arts and downshifting community, and people involved with food security and urban farming.

Depending on your current lifestyle choices, tackling your own financial feat could entail some of these bigger psychological challenges. But the rewards seem great.

“I feel like the best version of myself right now,” says Cait, who also got rid of 70 per cent of her stuff. “In getting rid of stuff and not being able to buy more, I’ve come to grips with who I am as a person. I’m very comfortable with myself. I don’t need to buy or own anything that will make me look, or will make people think of me in a certain way. I live a very good life with what I have.” SH