2935: How to Get Rich with Minimalism by Karen Trefzger of Maximum Gratitude Minimal Stuff on Personal Finance

[00:00:00] Have you ever noticed how a calm mind can really set the stage for a good night's sleep? That's the idea behind our new podcast, Good Sleep. Greg, our host from Optimal Relationships Daily, is here to help ease you into a peaceful night's rest with some positive affirmations. And these affirmations aren't just comforting. They can help ease anxiety and nurture positive thoughts, setting you up for true good sleep.

[00:00:25] So press play on Good Sleep Tonight, because a good tomorrow starts with a good night's sleep. Just search for Good Sleep in your podcast app, and be sure to pick the one from Optimal Living Daily.

[00:00:39] This is Optimal Finance Daily, How to Get Rich with Minimalism by Karen Trefzger of Maximum Gratitude Minimal Stuff dot com.

[00:00:51] A few weeks ago, I read a post about how 20 years of minimalist living can make you a millionaire. It's not a get-rich-quick plan, but unlike many financial schemes, it's a sure bet. Author Joshua Becker of BecomingMinimalist dot com uses conservative figures to make it clear that minimalism can save you a lot of money, which, reinvested over time, can make you financially independent.

[00:01:17] Not the people you want to follow.

[00:01:20] A 2017 Pew Research study found that 54% of Americans spend more than they earned every single month.

[00:01:28] While the personal savings rate increased in 2020, when people needed to stay at home, a surge of spending and debt began again once COVID-related restrictions were lifted.

[00:01:40] It's safe to say that even more people are overspending today, paying for their lifestyles with ever more credit card debt.

[00:01:48] When the Joneses spend more than they earn and save less than they need, keeping up with them is a terrible idea.

[00:01:56] It's a good thing minimalism is about more than decluttering.

[00:02:00] It's much more than a sleek, modern aesthetic.

[00:02:04] Minimalism can change your entire life, and one major aspect of that is financial.

[00:02:09] Becker writes about many of the ways that minimalist choices can save money, including smaller housing, utility, maintenance and insurance costs, smaller wardrobes, and reduced spending on non-essentials, particularly eating out and excess gift-giving.

[00:02:26] But there's more we can consider.

[00:02:29] Four additional minimalist monetary differences.

[00:02:33] Number one, reduced furniture and decor costs.

[00:02:38] Americans spend an average of $318 per month on furnishing and operating their homes.

[00:02:45] This $3,816 per year covers everything from dry cleaning to landscaping and pest control services,

[00:02:55] from new bath towels to a new chandelier for the dining room,

[00:02:59] and from wallpapering the living room to a new washing machine.

[00:03:03] Some of these are necessities, and some fall under the category of nice-to-have.

[00:03:08] With care, creativity, some DIY, and a smaller home,

[00:03:13] these costs might be reduced by 25%, saving $954 per year.

[00:03:21] Number two, reduced auto costs.

[00:03:24] According to Kelly Blue Book data, the average price for a new car in June 2024 was $48,644.

[00:03:33] Since most new cars depreciate 35% in value in the first three years,

[00:03:39] you could buy that vehicle for $31,619 slightly used.

[00:03:45] But even if you want a new car, you don't have to spend over $48,000.

[00:03:50] There are many excellent cars that cost far less,

[00:03:54] including the 2024 version of my current vehicle, which sells for less than $22,000.

[00:04:00] Even if you can afford to buy an expensive car,

[00:04:03] driving something more modest makes a strong statement about your values.

[00:04:07] With savings of between $1,600 and $4,433 per year, it's worth thinking about.

[00:04:16] Additionally, every month you keep a paid-off car puts hundreds of dollars in your pocket.

[00:04:22] At some point, an old vehicle costs more to repair and maintain,

[00:04:26] but until then, you can save a lot of money before you have to buy its replacement.

[00:04:30] And choosing to own just one car is a real game-changer.

[00:04:34] However, saving an entire car payment, plus insurance, gas, and maintenance,

[00:04:39] can make a huge difference to your budget.

[00:04:42] You also gain

[00:04:43] health benefits of walking or riding a bike for quick errands,

[00:04:48] the camaraderie of ride-sharing,

[00:04:51] and time to relax and recharge as you use public transit.

[00:04:55] Number three, reduce costs for entertainment.

[00:05:00] According to recent research,

[00:05:01] the average American spends $3,568 on entertainment each year,

[00:05:07] which is about $297 per month.

[00:05:11] Many financial advisors say that most people who are struggling financially

[00:05:15] do so because they have overspent in one of three ways.

[00:05:19] Too much house, too much car, or too much entertainment.

[00:05:23] My husband and I enjoy going to the theater,

[00:05:25] which is not a cheap entertainment option,

[00:05:27] but I reduce costs by

[00:05:30] pursuing minimalist hobbies,

[00:05:33] subscribing to just one streaming service,

[00:05:37] cutting magazine subscriptions,

[00:05:39] borrowing books from the library,

[00:05:41] or buying them used,

[00:05:43] choosing to see a handful of movies on the big screen

[00:05:46] instead of going once or twice a month,

[00:05:48] rarely buying apps or games,

[00:05:51] and completely ignoring the lottery.

[00:05:54] Instead, we treated ourselves to three shows this year.

[00:05:57] They were fabulous productions,

[00:05:59] and we truly enjoyed them.

[00:06:01] The average concert ticket price in the U.S. is $123,

[00:06:05] which is less than the average NFL ticket price of $378.

[00:06:11] None of that includes parking, refreshments, or merchandise.

[00:06:15] It would be easy to spend a lot of money,

[00:06:18] but let's be conservative and say you go to one of these events every couple of months.

[00:06:23] Go every three months instead,

[00:06:25] and you'd save $246 to $756 every year.

[00:06:31] In fact, in totaling what my husband and I spent for entertainment in the past year,

[00:06:35] I'm going to go out on a limb and say that it's possible to cut these costs

[00:06:39] by at least a third and still have a lot of fun.

[00:06:42] That saves $1,189 per year.

[00:06:47] And number four, reduced education costs.

[00:06:51] I value education, and I'm grateful for mine.

[00:06:54] I have a Bachelor of Music degree with a minor in English,

[00:06:58] and I earned a California teaching credential in graduate school.

[00:07:02] But I went to my state university and graduated with no debt.

[00:07:06] My daughter, who has a B.A. in linguistics

[00:07:08] with a minor in early childhood education,

[00:07:11] plus a TESOL, or Teaching English to Speakers of Other Languages, certificate,

[00:07:16] and my son-in-law, who has a B.S. in biochemistry and molecular biology,

[00:07:22] plus a clinical laboratory scientist license, did the same.

[00:07:26] According to Ernest.com,

[00:07:28] today's students borrow an average of almost $37,000

[00:07:31] by the time they earn a degree.

[00:07:33] Now, if you compare that to buying a car, see number two,

[00:07:37] it may be a good investment.

[00:07:39] But the New York Federal Reserve reports that about a third of all college graduates

[00:07:44] are stuck in low-wage jobs.

[00:07:47] We question whether an 18-year-old should waste time in a community college,

[00:07:52] even though they can take the same classes a freshman at Harvard would take,

[00:07:56] probably taught by a Ph.D. instead of a graduate T.A.,

[00:08:00] and all for far less money.

[00:08:02] My daughter and son-in-law both started at our local community college

[00:08:06] and finished all of their general education requirements

[00:08:10] while continuing to live at home.

[00:08:12] And college isn't the only path to success.

[00:08:15] For example, a two-year program in physical therapy assisting,

[00:08:19] or web development,

[00:08:21] or an apprenticeship as a plumber, welder, or electrician

[00:08:24] could lead to a great career and a good salary.

[00:08:28] By being more thoughtful about career choices

[00:08:30] and optimizing the path to a degree,

[00:08:33] you could probably save at least a third of the average student loan repayment

[00:08:38] of $503 per month,

[00:08:40] paying $335 instead,

[00:08:43] and saving $2,016 per year.

[00:08:47] Financial Freedom

[00:08:49] I'm not suggesting that minimalists should give up what they love.

[00:08:53] But by making thoughtful choices,

[00:08:55] we can waste less money and fund what we care about.

[00:08:59] Contrary to what our culture tells us,

[00:09:02] cutting back on non-essentials is not a sacrifice,

[00:09:05] but a gift we give ourselves.

[00:09:07] By my conservative estimates,

[00:09:09] these four minimalist choices could save you between $5,759

[00:09:15] and $8,592 every year.

[00:09:20] That's money you're free to use for what truly matters to you,

[00:09:24] whether that's travel, extreme generosity,

[00:09:27] or more savings and investment,

[00:09:29] getting you to that millionaire mark even sooner.

[00:09:32] That kind of financial freedom is truly life-changing.

[00:09:40] You just listened to the post titled,

[00:09:42] How to Get Rich with Minimalism

[00:09:44] by Karen Trefsker of MaximumGratitudeMinimalStuff.com

[00:09:49] and I'll be right back with my commentary.

[00:09:52] I think the monetary benefit to minimalism is compelling,

[00:09:56] but it's not the most exciting part for me.

[00:09:59] I've found that the less materialistic I am,

[00:10:02] the more idealistic I get to be.

[00:10:04] We're conditioned from an early age to be good consumers,

[00:10:08] so it does take a deep mindset shift to rebel against that.

[00:10:12] Reminding myself that the happiness fancy stuff promises

[00:10:16] is an illusion helps me keep my consumerist brainwashing in check.

[00:10:22] Research has shown that after enough income

[00:10:24] to meet basic human needs and some luxuries,

[00:10:27] there are diminishing returns to having more.

[00:10:30] I've found in my own life,

[00:10:32] happiness comes from relationships

[00:10:34] and surrounding myself with people that inspire me.

[00:10:37] It comes from creative expression,

[00:10:40] resourcefulness and flexibility around how I use my time.

[00:10:44] It comes from prioritizing self-care and personal development.

[00:10:48] I now see my satisfaction with having and needing less

[00:10:52] in terms of luxuries as a superpower.

[00:10:54] And I'll point out that it is so much easier

[00:10:57] to pare back on accumulating stuff when it is a choice

[00:11:00] versus if you lose your source of income

[00:11:02] and it becomes a necessity.

[00:11:04] There's a sense of freedom and confidence

[00:11:06] that comes from a minimalist lifestyle.

[00:11:09] I feel ready for whatever life throws at me.

[00:11:13] And that should do it for today.

[00:11:15] Have a happy rest of your day

[00:11:16] and I'll see you on the Friday show tomorrow

[00:11:18] where your optimal life awaits.

[00:11:20] and I'll tell you on Monday show till you see the quasars.

[00:11:20] to gravize

[00:11:21] a total return