According to the UK Money Charity people in the UK owed £1.54 trillion at the end of June 2017. that’s an average debt per adult of £30,661.
If you look at household debt, the average consumer credit card debt was £7,436 in July 2017, up from £7,407 in June. Including mortgages that’s an average debt per adult of £30,661.
As someone that has been in a ton of debt and had to use an IVA to solve my money issues, I’m now unable to get a credit card, let alone a mortgage.
I am more than aware of the huge amount of stress and pressure that struggling with money can put on your Happiness and Wellbeing.
Everything I own now fits into a 45 litre carry-on Backpack and a day bag. I often get asked how I can possibly survive and be happy with so little, but it’s been the best decision I’ve ever made.
You can read the breakdown of my packing list here, but today I wanted to talk to you about the reasons behind my decision to own and spend less, and the difference between ‘needs’ and ‘wants’ when it comes to what you spend your money on.
Perhaps by gaining some insight into my decisions may make you reflect on the things you spend your money on, and whether they add value to happiness and your life.
This way you can take control of your money and your time.
Most importantly – please remember what you own, or owe, does not determine your character. You have control of your own happiness.
What you spend money on is Important.
Every day we swap our time for money.
- We get paid for our time at work.
- We then buy things to save our time.
- And we buy things to enjoy our time.
As a result, what we spend our time and money on is relative. The more you choose to own, the more time you need to usually need to spend working.
Owning less and carrying everything I own on my back does not make me a better human being. It doesn’t mean my moral compass is better than yours.
It means that I have decided, for me, that I need a smaller amount of things then you do. Because my focus putting the experience over things, I had two options when I left the UK. Get rid of everything else or keep it in storage.
Distinguishing between ‘needs’ and ‘wants’ is about is owning exactly the right about of things for you and your priorities.
Distinguishing between ‘needs’ and ‘wants’.
Let me make it simple. Here’s a list of my needs and wants.
Wants: (In no particular order)
- Hotel Stays
- First Class Travel
- Spa Days
- Festival Tickets
- New Tattoos
- New E-Books
- Decent Coffee
- A personal assistant…. need I go on? ?
If you are one of the many people in the UK struggling financially just to keep up with your ‘wants’ then there is a problem.
I know we all spend beyond our ‘needs’.
This is an opportunity for you to determine how much of your monthly spending is tied to your ‘wants’.
Then you can adjust your habits to put less pressure on yourself financially.
We should aim to avoid or reduce debts. This way you can take control of your money, your time and your wellbeing.
Try this exercise.
Divide your monthly spend into ‘needs’ and ‘wants’. As a guide, here is my real life list:
- Travel Expenses
- Food Costs
- Wifi Access (local sim cards, co-working spaces etc so that I can work)
- Meals & Drinks Out
- Visiting Tourist Attractions
- Working in coffee shops
- Staying in an Apartment over a hostel
- Buying new books on my Kindle
- Spotify Subscription and buying Music.
I know I don’t need to eat out all the time, so I know I can eliminate this when I feel I am spending my budget too fast.
I really appreciate enjoying good music and reading, so I make sure to allow myself money every month to enjoy both.
Automated workflows and processes allow me to batch and schedule my work so that my work time is shorter and more efficient.
Do you need to reduce your ‘Wants’?
Perhaps by creating your list, you’ll find you have been spending money on things you don’t use or that is not of value to you:
- Gym subscriptions
- Online subscriptions like Spotify, Netflix, amazon prime or kindle unlimited you hardly use.
- Online Clothes shopping when your wardrobe is already full.
- Throwing out waste food.
Or maybe you are could swap to cheaper alternatives:
- Buying books instead of going to the library.
- Buying Takeaway lunches instead of making packed lunch.
- Going to a restaurant with friends rather than having people round for dinner.
- Joining a gym class rather than going for a walk or doing an at-home exercise video.
Make a deal with yourself.
For a week, or if you are adventurous a month – make this deal.
For every pound, you spend on a ‘want’ put a pound in a jar for future ‘needs’.
At the end of the experiment, see how much you have spent.
Often you will find a weekly spending on ‘wants’ could have covered several weeks of ‘needs’.
You are not just spending money, you are spending your time. Adjust accordingly.
How to help with your spending.
Look at the things you own and get rid of what you don’t use. Addressing the items you have already spent money on that you don’t use will make you focus on how you spend your cash.
Addressing the items you have already spent money on will make you focus on how you spend your cash.
It’s not uncommon to have things you don’t use. You can choose to start using them, donate or sell them. his process will help you establish patterns in your previous spending habits.
This process will help you establish patterns in your previous spending habits. Maybe you have lots of clothes you never wear, or music you don’t listen to.
Perhaps you can start up an old hobby, start using your ‘nice’ kitchenware again or gift a friend with toiletries you won’t use.
Some sobering facts:
- British research found that the average 10-year-old owns 238 toys but plays with just 12 daily (The Telegraph).
- The average American woman owns 30 outfits—one for every day of the month. In 1930, that figure was nine (Forbes).
Buy Good Quality Stuff – and use it.
There is no point treating yourself to something, only to not use it as you don’t want to ruin it. Instead of buying things that are potential ‘favourites’ (like a favourite dress or bag), often we buy cheap things for everyday use – like cheap clothing or takeaway coffees.
The smarter way is to put your money where you will use it often, even daily and enjoy it more.
Buy a bag that will last daily use for years, or a decent home coffee machine, you will reduce feeling the need to purchase more things.
Remember life is about People, not Things.
Also published on Medium.