Not that you should own nothing, but that nothing should own you.

This post contains affiliate links. See Disclosures for details.

So for awhile now, I’ve been reluctant to write about money or personal finance on this blog. Not sure why. I had this idea that talking about money would turn people off and would be the opposite of minimalism and focusing on what you value. This month has been a long month of self-reflection and after reading the “Secrets of the Millionaire Mind”, my mindset about money has shifted a little bit. Whereas, I felt money was bad and not inline with minimalism and eco-friendly living, but in reality, I’m learning that money can be a powerful tool to live the life that you want, under your own terms. For me, I’m owning up to the idea that money can be used for good and that wanting money and having money does not make me a bad person. In fact, money can help emphasize the work that I want to do in minimalism and eco-friendly living. With that, today I want to talk about minimalism and financial freedom and why moving towards a more minimalism lifestyle can be the catalyst to creating the financial independence you want.

What is Minimalism? What is Financial Freedom? To me, Minimalism has always been focusing on the things that I value. This means focusing less on the accumulation of stuff, but more on personal growth, on relationships and on helping the world. You can read my minimalism journey here. Today, Financial Freedom means more to me more than ever and I will share a story that I have never shared here before.

Back in 2016, I was laid off. The kicker was I had just joined to the company 5 months before in the hopes of helping them build a new product. I felt the tension in the air when a meeting was scheduled. There were probably 20 of us in the conference room when the CTO came to make the announcement. As the head of HR passed around our separation papers, I felt relieved. Strange as that sounds. Most of us went out for drinks (specifically shots) afterwards and I felt bad for my co-workers who weren't sure what to do, how to react. In the back of my mind, I started calculating my savings and how long I could last. I was lucky. I will never forget that feeling of security. To me that is Financial Freedom. (Of course, the support of my family and friends throughout this time was invaluable.) Today, I'm no means set, but I do owe a whole lot of gratitude to minimalism for allowing me to focus on things that mattered and allowing me to adopt a lifestyle change early on. This post will focus on a few strategies including minimalism to start your journey to financial freedom. Majority are actual examples I or my husband took to build up our security. This post is long so if you get tired of reading, bookmark it. I will also have a list of action items that you can print out to track your progress. Financial freedom will mean differently for many of us, but in the end, it's about having peace of mind for the future ahead. 

I'm going to borrow a concept from project management called the Project Management Triple Constraints. (Sorry, my former day job has more influence than you know, hence the name of this blog.) The Triple Constraints state that a project relies on 3 basic constraints, time, cost and scope. Adjust one and the other two are affected. Well, we can apply the same thing to Wealth Building and ultimately Financial Freedom. We need to understand how each factor affects success. The better we manage each factor, the better the success rate will be. When my lay-off happened, I had been in the work force for a full 11 years, working full time at various companies. I worked my butt off in college and had a job lined up before graduation. My journey is different and so is yours. Regardless of where you are, how old you are, I hope some of these strategies will help you create some financial security for you and your family.

This post contains affiliate links. See Disclosures for details.

Change Your Money Mindset

Money is is extremely important in the areas in which it works and extremely

unimportant in the areas in which it doesn't.

Bless that which you want.

Money will only make you more of what you already are.

True measure of wealth is net worth, not working income.

Before we get down to strategies to earning more, spending less and investing the rest, let's first talk about the money mindset. Our money mindset is basically how we come to see money in today's world. This comes from past conditioning. From how your parents handled money, to the way they spoke about it,  to the lack of money management education in today's school system, money mindset plays a big impact on how you perceive money and how you spend money. I recommend two books for you to read regarding money mindset: The Energy of Money and Secrets of the Millionaire Mind. The content in these two books will put into perspective what money is. In the end, money is just a tool.

Women and Money

I want to address one more thing when it comes to money. If you are a female, if you are a person of color, if you are an immigrant, you deserve as much access to resources to help you grow your money. Do NOT shy away from learning, from standing out and from creating a secure future.

I wrote this post partially for my college aged sister. She is in her 4th year of a 5th year architecture program. My parents will be retired by the time she starts her first, real job. I'd like for her to start considering these strategies early on.

Regardless of whether you are single AF today, statistically, the odds that you will be partnered up sooner than later is pretty high. Be prepared. And whether you decide to be DINKS (double income, no kids), continue to equally share in handling the family's finances. Know where your money is coming from and know where it is going. Finances is not just a man's responsibility, it should be equally shared across partners.

If you want to learn more about personal finance from women's perspective, head to Sisters for Financial Independence (www.sistersforfi.com).

Is Student Debt Worth It?

If you were like me, you probably graduated college with a few thousand dollars of debt. Sadly, I didn't know too much about student loans when I entered college so I spent around 10 years paying of student loans. Now, experts will tell you that student debt is good debt because it is helping advance your education, blah, blah, blah. The thing is, had someone put in perspective that my future income would be used to pay off my student loans, that I would have to stay in a job I didn't like a little longer and that a part of my income would be going towards an interest rate that I felt was robbing me blind, I would have been a more conscientious student. Now, I never regret the path that has led me here today, but if you are reading this in high school, or in college or as someone who has influence over someone about to enter college, then share with them this advice.

Yes, go get an education from an accredited college. Learn as much as you can. Network as much as you can. The partying is nice. The sleeping in is nice. The memories are great. Keep this in mind though that you don't want to spend 10-15 years to pay for the 4 years that you had, as great as they may be. While you are doing all of that and if you must incur student loans, minimize that debt! Spend time looking AND applying for scholarships. Consider finishing early instead of doing the entire 4 years. Supplement your education with other professional skills. Now more than over, one can learn anything and everything via so many online resources. Use other skills to make yourself valuable in the market. Just because you study one specific major in college, doesn't mean you are bound to that. Of course, I'm saying this in hindsight, but better learn now then later.

Understand your value to the market and work to promote that.  Once you are paid your value, pay down this debt as quickly as you can. It may mean sacrificing a few nights of staying in, but do so because having no student debt will provide you great peace of mind moving forward. It will clear up your mental energy and allow you to focus on wealth building instead of debt paying. And if we go back to our Wealth Building Triple Constraint, this hits under the "Spend Less" factor. What can we then do with those funds?

Minimalism As a Way of Life

I grew up in a middle class family household. My parents are hard working immigrants. The one important thing my parents taught me was to live way below our means. We were not the family that always had the brand new car on the street, but we were heartily fed, wore presentable clothes and went on the occasional vacation.

When you leave college and start earning your own keep, the lifestyle you live is a choice. You may refute me on this, but no one forces you to spend $$$ at the bars, no one holds you up to spend $$$ at the mall. Learn to live minimally. I'm not saying deprive yourself of the good things, I'm saying focus on the things that matter to you. If you want to travel more, then something has got to give. We wall want to live in the now. #YOLO takes money, honey! I have nothing against driving a nice car or having a nice home, but don't go poor trying to look rich. Be wary of lifestyle inflation. This happens and we all need to be aware of it. We live in a world of consumption and it's very easy to get caught up in the latest, shiny thing.

I encourage you to adopt a new lifestyle, namely "minimalism." It's not about the white walls, but about moving away from the conventional work, spend cycle. Minimalism is finding things that you value, focusing on those and eliminating the rest. This will be different for everyone.

Here are a few areas of your life to minimize:

Cut Cable - This is probably easier now more than ever especially with the growing video streaming companies out there. Here's a breakdown of what it will save you in time and mental energy.

Clothing - Look at your closet and calculate how much of your money AND time went to purchasing those clothes. You will have a Carey Bradshaw moment: I will literally be the old woman who lived in her shoes! I'm not asking you to start wearing rags. I'm telling you that clothes hanging in a closet for years is a waste. Invest in good, quality pieces that you actually wear. Just because it's on sale, doesn't mean you need it. Trust me! If you need help figuring out what you actually wear, try out the Cladwell app to track your daily wears.

Books - The library is your friend and wherever you are (especially in the US), you have access to a plethora of books. I get it, support your author friends, but after that point, join the sharing economy and borrow books. You'll be thankful you did when you don't have to lug pounds and boxes of books on your next move. And let's be honest with ourselves, how often do we really re-read a book or re-open those told textbooks. Don’t keep old books to show-off. Trust me, no one notices.

Alcohol - Dare I say to give up alcohol? No, but do minimize it. The markup of alcohol at bars and restaurants is ridiculous. Spend wisely. Also, as someone in their 30's, just a warning that alcohol is a major cause of body inflammation so drink in moderation. If you want proof, look back at the photos where you are drunk: note that puffy face, red eyes, belly, etc.

Food - I love Seamless as much as the next person, but seriously learn to cook. This is probably the single best skill you can take on for yourself. Not only will it help you in the finances department, but it is healthier in the long run. Grab your friends and cook together. This is a great way to bond and reduce spending.

Going back to the "Spend Less" constraint from our Wealth Building triangle, consider banning the concept of retail therapy from your mind and take on new habits instead.

Contribute to Retirement

It doesn't matter if you are just entering the workforce or have been in it for 10 years, please make sure you contribute to retirement. This is the "Invest the Rest" constraint, but instead of waiting on what is leftover after spending, we take a proactive approach and instead do a pre-tax contribution. Social Security may not be around by the time we all hit retirement so it's our responsibility to secure our future. Contributing has many advantages:

1. If you do a pre-tax contribution, it lowers your current income and potentially the tax you pay for that income today. (Potentially because of where you sit in the tax brackets.)

2. If your employer does a match. That is basically free money. Take it! Take it! We no longer live in a pension system so make sure you take advantage.

3. It reduces your spending income today which automatically creates a lifestyle that costs less so your money goes further today and tomorrow. This is important because the more you control your expenses and live well beyond your means, you save more and invest more. Again, see lifestyle inflation. Additionally, as you get older, because your past cost of living was not extreme, you won't be as keen to spend the same when you are older ensuring any money taken out in the future, while taxable in the future to be within the boundaries of a smaller income bracket.

I know that it may be too early to even think about retirement when you are in the ripe age of 25 or even 35, but you know what, the odds are not in you favor, my friend. We all grow old. There is no sugarcoating that fact of life. The choice is yours whether you want to age well and be able to enjoy the things you want well or if you want your future kids to be funding your lifestyle. Not sure how I would feel if I have to ask my future kids money to go out.  If you don't end up spending the money in retirement, it can be passed on to help build you family's future wealth.

Negotiate Everything

This is easier said than done, because for many of us, we are just so "grateful" for getting the job or something related, but if you truly know your value in the marketplace in whatever role you are in, negotiate what you want, whether it's salary, flexible time off, etc. Don't be greedy about it and always back up your asks with concrete deliverables and always get in writing. Sometimes we see negotiating as haggling and for many of us, we've come to identify it as "being cheap" or "being difficult", but as long as there's something to be leveraged, negotiating can be the key to getting what you want.

Negotiate your income. Be prepared to offer a range for the job that you want. A bit of online research will show you current salary ranges for positions. If salary is not a negotiating factor, how about time off? I once mentioned that I was currently getting X amount of vacation at my current job and would love to do get the same (knowing full well that the new company had a cap of 2 weeks vacation after reviewing Glassdoor.)  That did not require a lot of negotiation, but it resulted in my favor. Additionally, if you also have a unique skill in your circle of friends, negotiate and barter your skills for something that you do need. This is a great way to exchange your value.

My husband was able to get his work to pay for grad school. Instead of taking the regular pay increase, he asked and negotiated if the company could cut a check directly to the school at a certain amount each semester. So instead of taking a $5000 increase and getting taxed on it, that $5000 went directly to paying for grad school. Net result, no extra interest to pay for in the future, no adjustment in taxable income and he was able to use ALL of the funds. Of course, this is unique to his situation, but if you work for a smaller firm where adjustments like these can be made, then ask. It never hurts to ask and sometimes employers will get a tax break for contributing to continuing education. Talk to HR or Accounting and see what's possible. Perhaps, you'll the first to ask and get it.

Negotiate bills too. If you've been a long time customer of certain companies like a phone company, an insurance company, a credit card company, negotiate to get your bills or interest rate lowered. It takes a lot of money to acquire a customer which is why most companies always want to retain existing customers. If you've been loyal, paying your bills on time, no accidents, etc. use this as leveraging power to negotiate your way to lower payments. Check out some of these telephone scripts that Ramit Sethi has on negotiating.

Also, don't forget to check out negotiating classes on Skillshare. For the price of a coffee, you can learn something that will save you thousands of dollars.

Read The Fine Print

I'm a geek and I have no shame admitting that. I am one of those people that reads the full Employee Handbook before signing off on it. I read the Terms & Conditions on credit card applications. I like to review Privacy Policies on websites. This can take some time, but it'll take as much time as spending a night scrolling through social media. Reading the fine print can open up a whole lot of doors. For me, it opened a gateway to getting grad school paid off by my corporate job.

I joined a pharmaceutical company straight out of college. A few of us were newly minted graduates in IT and we started talking about going to grad school. We had all just graduated in May. Could we start again in September? The company had a program. Did we qualify? Do we have enough time to get our applications in place? Can we get managerial approval? Well, reading through the Employee Handbook, informed us that we could and we did. A group of us complete grad school under the company's dime. Best line I ever read in the Employee Handbook.

Read through some of the corporate information, what can you take advantage of? Are there classes that you can expense, can you submit gym expenses, etc.? Take it. Another area that I personally took advantage of was contributing to an HSA. I honestly wasn't sure what I was going to use the money for, but I socked away money which our employee plan allowed. HSA is a Health Spending Account and basically you can set up for funds to be deducted from your paycheck to go into this account. This will be unique to the type of health plans your company offers. It's pre-tax so again it helps lower your taxable income should you be in that situation. Additionally, the account moves and grows with you. It does not expire and you can take it with you from job to job (unlike FSA). There is no penalty for withdrawal and the withdrawal is tax free. So I ended up using these funds to pay for LASIK, which has been one of the best decisions of my life. So not only was I able to pay for this costly surgery without incurring any additional out-of-pocket expenses, I saved money without really changing my lifestyle and now I don't even have to think about contacts or the waste that they generate. Win! So with my new 20/20 vision, I tackle that fine print more than ever. ;)

Travel Hacking 101

If you are in your 20's or 30's, you probably have a few credit cards already. This advice is only for those that do NOT have credit card debt. If you've been practicing the Minimalism advice at the top, this may be you. Start doing some travel hacking. For those not familiar, travel hacking is a way to earn frequent flyer miles to spend on flights, lodging and upgrades. Most of the time, these miles are earned through credit cards via bonus sign-ups. For example, last year, Chase introduced a new card called the Chase Sapphire Reserve and with it included a 100,000 mile bonus (check now to see what their current bonus is). If you qualified and spent a specific amount within 3 months, these miles were yours. Now, you may be wondering what can I do with these miles. Well you can use them to book a ticket somewhere in the world. You can use it towards a hotel. You can basically use it to travel anywhere. If and when done right, you can essentially earn "tax-free" money to make your travel dreams come true. Again, this is only for those that have good credit card management and are paying off their credit cards each month. Travel hacking has allowed my husband and myself to visit Istanbul a few times (where his family is from), visit Hawaii, California, the Philippines and so many other places. This does require being a bit diligent with what you are opening up and managing credit cards wisely. The best thing is that it allows you to travel to all of the places you've dreamed off while you are still young and able without incurring hefty debt. 

The Choice is Yours

You have to make the choice whether you want to keep up with the Joneses or pave your own path. If you want to keep up with the Joneses, remember that there's going to be something better, newer, always! Catching up may be difficult. If you pave your own path, you define your own version of success.

Learn to optimize your life and your finances. After all, it's your life. Don't let the judgements of others, of your parents, of your siblings, of society stop you. When all is said and done, when money is no longer a worry, then you have the ability to pursue your purpose 100%. You'll be able to do more good in the world when your energy is focused on helping others as opposed to figuring out how to get money to live. Start today! Don't let perfect be the enemy of the good.

I personally use Personal Capital to review my finances and have a pretty habit of checking it often, sometimes more than social media. It's a pretty good deal as their tools are free, but they will sell you on their wealth management services which you can decline politely. I plug mine and my husband's accounts to make sure we are not over allocated on certain funds and are managing those fees.

If you need some encouragement, send me a note privately cat [at] thedosomethingproject.com. My former day job was a project manager so if you need someone to prod you along to get those action items completed, let me know.

If you want to learn more, head to sistersforfi.com and peruse the blog posts on getting your financial independence journey started.

Then What

So what if you've done what you can and have the freedom, then what? Well, my dear the world is yours. Find your purpose. Spend time with family. Be there when your child says their first word. Be there when it's your turn to take care of your parents. Volunteer. Work for that cause you've been dreaming of. Get that van you've been eyeing and make that trip. Start that business. Pay it forward. Whether you offer your time or your money, the point of financial freedom is to allow you to do the things that you want to do. Not many of us will be lucky to do this. Live Pleasantly and Do Good!

Action Items to Optimize Your Financial Life

Regardless of where you are, don't forget to take that first step. I've outlined them below and if you fancy, print out this handy Printable Tracker and put it in your journal so that you can continuously refer back to it.

• Review your expenses and figure out what is a need vs. a want.

• Start adopting a Minimalist lifestyle. As a first task, take inventory of your current possessions. Sell what you don't need. Use the funds to pay off debt. Re-assess. De-clutter will create the open space that you need to further find your financial freedom path. Stop using retail therapy as the answer to life's woes. It almost never works.

• Open an online savings account. I continue to like CapitalOne 360 because while the rates aren't so nice, the fact that it's an online account means you have to put in a lot of effort to take money out which means less barrier to spend it on an impulse. Open the account and create the following savings accounts for free.

• Pay off those debts. It's always better to pay off debts that are high in interest than save or invest at a lower interest rate.

• Contribute to your company 401K up to the company match. Then start increasing and max it out. Remember that it should be increased as your income increases so any extras you make doesn't get eaten by taxes, but goes to your future.

• Contribute to a ROTH IRA after you've contributed to a 401K. This money is post-tax so you've already paid taxes today. There is an age minimum to when you can withdraw it, but it grows tax free and can be withdrawn tax free at 59 1/2.

• Review your credit cards. Create a spreadsheet with the advantages of each: interest rate, bonuses, etc. There's a misconception about credit cards and your credit score. Yes, they affect it, but not in the way you think so don't be afraid to shop around. Read more about that here. I continue to personally like the Chase Sapphire Preferred because the yearly fee is not as high as the Chase Sapphire Reserve.

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