Besides being on a journey of financial independence, I’m also searching for ways to simplify and improve my life. In today’s post I’ll talk about the changes I’ve made that have had the most impact.
#1: Automating My Savings
This comes as no surprise to anyone with any kind of exposure to personal finance. Automating your savings is the easiest, most painless way to accumulate wealth. What you don’t see, you don’t spend. It’s as easy as that. I’ve always contributed to a 401(k) from the first day I started working my first “real” job out of college. Admittedly, sometimes I was only contributing 1% (when I bought my house, for instance) but I was always contributing.
The side effect of automatic savings is that you avoid lifestyle inflation. Anytime I get a raise, I either change my 401(k) contribution or the amount that is automatically moved to my taxable brokerage account each payday. Even though I don’t spend much money, I don’t live in deprivation. Instead, it’s made me really think about what I value the most so my money goes towards only those things.
#2: Tracking My Expenses
Prior to 2014, I didn’t bother tracking my expenses. Outside of my mortgage, I was debt free and living within my means, so what was the point? In 2014 I started using Mint. Mint made it easy because all my accounts are linked and I can split transactions into multiple categories. This makes it easy to be very specific about what each transaction was for. While I did most everything using the app, it’s the desktop version that’s the most helpful. Since I rarely used the website, I started tracking my expenses in Excel instead. Excel is free for mobile devices and I use Dropbox so that I can view my files on both my iPhone and Android tablet. It does take more diligence to track expenses this way, but I find it works best for me, as I can easily see a running total for the year as well as month over month.
Until I started tracking my expenses, I had no idea how much I spent annually on anything. Sometimes it’s surprising ($4,000 on my cats!) and other times it’s embarrassing (only $500 in donations?). While it hasn’t caused a major behavior change yet, I do feel more in control knowing exactly how my money is being spent.
#3: Smaller Wardrobe
In 2016, I took a very serious look at everything in my closet and dresser. Anything I hadn’t worn in at least a year or I didn’t feel comfortable in was donated to Goodwill. I now have 5 short-sleeved shirts for summer and 5 sweaters for winter and the same black pants to wear to work year-round. There’s never a question of what to wear, which has made my weekday mornings so much easier and efficient. My weekend clothes are for comfort, with a couple extra pieces in case I go out and need to look presentable (e.g. not a sweatshirt and jeans situation).
There’s now space in my closet so the hangers can slide around and my drawers aren’t stuffed full. Everything is clearly visible so there’s no digging around to find a piece of clothing. It also has the added benefit of making laundry easier: I do the same loads each week and know exactly how long it’ll take to get it all done.
#4: Keeping a Food Diary
I wrote about this at length in this post, so I’ll just briefly talk about it here. I’ve never been too concerned about the number of calories I consumed but instead worried about the sugar and sodium content. I’d suspected it was bad, since those two things are added to everything, but it was shocking to see just how bad it was. After just one day, I completely changed what I was eating. This change will definitely pay off over the long run.
#5: Meal Planning
This is closely related to #4. By planning my meals for the week, I’ve reduced my grocery bill by about a third and cut down on food waste immensely. I used to have tons of food in my freezer and cupboards, just in case I was craving something. Similar to a smaller wardrobe, meal planning ensures that it’s much easier to find exactly what I’m looking for, without digging through a bunch of stuff.
Now that I’m more aware of my sugar and sodium intake, meal planning guarantees that I don’t eat a combination of foods that would put me over my limits. Prior to this, I’d eat whatever I felt like, without thinking about the content.
What changes have you made that have had the most impact on your life?