Selling the Dream of Financial Independence – Part 2

In the first post of this series, we laid the groundwork for tempting a spendy spouse into a more frugal future. It was my attempt at combining the necessary logic and psychology that are required to slowly but surely allow someone to change their mind about the connection between spending and lifetime happiness.

In this post, we will move on to some action to go with all the talking and book-reading assignments that were part of the first article.

Step 6: Personally Demonstrate Each Change Without Forcing Participation

This should go without saying, but I’m going to say it anyway. If you want to create change, you must first be the change you want to see in the world. You want your spouse to start riding his bike to work, so you will start riding your bike to work and demonstrating how easily it can be done. You can take on the grocery shopping and start cooking more at home. You can plan social events for your friends to help create healthier traditions. The former “Beer and wings Happy Hour” can turn into “Bike to work Friday” followed by a cookout at a location that rotates through the houses of various friends. Before expecting your Mustachian Trainee counterpart to take part in these things, you must first master them, so you can serve as a coach.

Step 7: Point out that the Benefits Begin Immediately

“OK, I’ll admit that the Money Mustache family has it pretty good, but according to the math you showed me it will still take us 17 years to reach retirement. I don’t want to suffer for 17 years, I want to live my life now!”

To understand this argument, imagine a dangerously unhealthy person who is addicted to eating ice cream on the couch. “Sure, I know I could be active and muscular 1-2 years if I stopped doing this and went outside”, the person says, “but I don’t want to deprive myself of ice cream!”.

You would see right through that argument immediately, right? The unhealthy person starts to benefit the very second he puts down the ice cream bowl. He might not feel the benefit immediately – he just feels the craving. But when he goes outside and starts walking, his body starts to rebuild its lost muscle tissue, to suck away the stored fat, and every single thing about his lot in life starts to improve. The trick is getting your spouse to understand that he or she is really making the Ice Cream Addict’s excuse.

Explain to them that it has been known for decades that buying things does not make you happy, and enjoying life while spending less money is a skill that develops just like a muscle, as opposed to a permanent state of deprivation. Point out that every dollar you ‘stash away is one step further you have moved from the edge of disaster. Every purchase you skip is going directly into a bank of leisure time that you can enjoy at any point you choose. Having greater savings and lower expenses, also known as “Fuck You Money”, directly results in lower stress in your life, and increased freedom.

That’s right: FREEDOM. What is more worth buying, than Freedom itself? Why would you buy much of  anything at all, when you haven’t even bought your own freedom yet? Freedom is something that can be bought one chunk at a time and savored. You’ll become addicted when you get your first taste. And thus, the benefits begin immediately.

Step 8: Start with Baby Steps

When I first moved to Boulder Colorado in 1999, I was invited by my new Boulder-bred coworkers to go out for a bike ride at lunch time.

“Sure”, I thought “I’ve been riding bikes for years, I’m sure I can roll with these guys”.
“Don’t worry”, they said, “We’re really mellow when we ride at lunch, everyone is just out to have a good time.

30 minutes later, we were already 10 miles outside of town, racing up a steep rocky incline under the searing hot sun. “The trail starts just up ahead!” one of them called out, as I coughed out a bleeding lung and shamefully turned my bike to begin the thousand foot descent back toward the city limits alone. “Uhh.. that’s enough for me, I’ll catch you guys back at work”.

The casual lunchtime ride of these experienced cyclists was much more extreme than even my biggest bike expedition before that point.

And so I know that Mr. Money Mustache can seem extreme to people who come across him for the first time. It’s because I’m old now, and I’ve been doing this “buying less shit” shit for a while. The natural path of any enthusiast is to get a bit more hardcore over time, so that the Enthusiast’s “normal” normal is the average person’s “Insane Cuckoo Bird”. I don’t think I’m weird to pull 100 pounds of groceries home on a bike trailer through a blizzard on a winter night, but I must also acknowledge that a non-biker is better off starting out by just riding their bike to the library on a warm Sunday in April.

That’s a lot of biking analogies, but this isn’t really about biking. I’m talking about any  lifestyle change. Choosing more appropriate housing. Changing your eating. Reducing your gadget buying. Not watching television. All of these things have a beginner stage, followed by a continuum that leads up into hardcore territory. On this blog, I talk about a moderately hardcore level of lifestyle changes – the type that allows my own family to live on $700 per person per month. You don’t have to start at exactly this level. You just have to know it’s there, waiting for you to eventually reach. And then perhaps surpass me so you can mock my wasteful lifestyle as other senior Mustachians do in the comments section.

Step 9: Budgets and Allowances are Baby Steps too.

In the realm of Frugality, the equivalent of the slow April bike ride is the budget. My long-term goal is to have you enjoy frugality for its own sake, without requiring a budget to keep yourself from overspending. I’ve never used a budget in my life, because I like to control my spending consciously instead – it can go down if there’s ever a need. But for beginners, starting with a budget or a monthly “fun stuff” allowance can be a good set of training wheels.

A beginner consumer is like an alcoholic who has a vodka dispenser in his kitchen, connected to a pipeline that runs directly to Russia. His consumption is limited only by his ability to stay conscious. If you take away his tap and replace it with a vodka dispensing machine that plunks out one 750mL bottle every 24 hours, which he desperately downs as soon as it shoots out, you HAVE improved his life somewhat. But he’s still not going to be happy about it. He needs to keep developing his self-control, until he realizes that he’s got better things to do with his life than drinking vodka at all.

Similarly, a weekly allowance to blow on massages, lattes, and plastic trinkets from Target is a good start. But it’s not a great lifelong solution. The ideal solution is having an unlimited budget, but finding that you get more pleasure out of not spending it, than you do from spending it.

When I proposed a similar concept in an old article called “How Much is That Bitch Costin’ Ya?“, I took some heat in the comments. “I get an allowance because DW can not only squeeze the eagle until it shits, she can also snap its neck and reach in and crush its heart”, is how one University professor expressed his take on the benefits of budgeting.

I can definitely see the point and the benefits of the personal fun allowance. But I can also see what life feels like beyond the allowance, and I can tell you that it is a liberating place. Mrs. Money Mustache and I have an effectively unlimited fun budget. We have virtually unlimited savings, no rules, and we don’t consciously watch each other’s spending. Yet we still end up buying very little each month. It’s because we’ve solved the wants themselves rather than just setting a limit on how much of our wants we’re allowed to indulge.

The important part is to realize that you can always go further. You are always a wimp, and there is always someone more badass than you. Within badassity lies the key to happiness, and I think everyone has a certain respect for awesomeness in its various forms. The key is to make the mental connection between frugality and being awesome. This will become easier over time as the entire world starts doing it, now that I have revealed that Frugality is the new Fanciness.

Step 10: Keep it Fresh with Challenges

The habit of living efficiently definitely feels good. But just like with any sport, you can increase your performance by making a game out of it.

When you issue a challenge to (or accept one from) another person on the financial independence track, you increase your own motivation. All through this month of March, I felt the eyes of the MMM readers upon me, searching for weakness or fraud, and this improved my behavior considerably. In the Forum of this blog, we even have a section called “Throw Down The Gauntlet” for people to trade ideas and challenges. Even for the more introverted personality types most found reading financial independence blogs, this silly competitive stuff works.

When living with another person, finding ways to induce competition is especially powerful.

Last Step: Build the Good Type of Addiction – with Tracking

Spending less money exerts a calming force on your life. But to build your motivation, sometimes you need excitement rather than calmness. For people on the path to riches, some of the excitement can come in the form of tracking your results. Memorize the logins and passwords to your key accounts for both investments and debts, so you can see real change each month. Keep a “net worth” spreadsheet, fiddle around with retirement calculators, and use any other financial software that you find enjoyable. Watch your index funds on finance.google.com. I’m still happily using the free web-based Mint to do all of the above, frequently reviewing my monthly spending and saving as well as graphing changes in net worth.

If YOU are already a saver, and you want to convert a spouse, you must get him or her hooked on seeing her own wealth. When she saves, it grows. When she spends, the growth stops. Every three months, the dividend payments come in. When the stock market crashes, she gets excited about getting more shares at a lower price. Try to build the idea that the number of shares and the dividends are the part that matters, because you don’t want to breed a fearful anti-investor who feels like selling shares instead of buying them, when the prices go down.

Final Words:

We’ve covered ten important steps to creating a newly frugal person. We’ve combined psychology and action. But although these are the steps that have helped me persuade various people, there is no perfect recipe for everyone. The biggest tips of all are to be patient, be positive, and be persistent.

Not everyone has the same reason for wanting to embrace frugality – if you love your job, you might not be motivated by the idea of quitting. If you’re already rich, you might not even be motivated by becoming financially independent. But I strongly believe that everyone can find a better life for themselves by minimizing their material wants and needs, and instead maximizing the learning they do about themselves and about life itself. You’ve got a real shot at having a great life here – as long as you don’t let consumer culture distract you from the true goal of living well.

And for those who are not yet attached – be yourself, and don’t be afraid to show your independence. While inappropriate and misguided cheapness won’t get you laid, true badassity and a desire to not to be wasteful is sexy. Live that example, and you will be rewarded with a mate that is as sexy as you, perhaps saving you the effort of working through these ten steps the next time you hook up.

Epilogue: About a year later, my financial blogger friend The Mad Fientist published this inspiring post on the same topic: