Wouldn’t it be nice to work if and when you want to? To not spend over half your day making money just to pay bills and rent? That’s the basis of the “work optional” movement. Not to be confused with the FI/RE movement, work optional is having the financial freedom to work on your terms. Financial advisor, Doug Dahmer phrases it as, “Doing the things you love, when you want to, with income being an added bonus.“
The main course of action to achieving any financial goal comes down to your spending, savings, and investing habits. Otherwise known as your money management skills. The Dave Ramsey cult suggests you pay down debt as soon as possible and by all means necessary; other financial advisors say savings is the key; investing is the answer; both paying debt and saving; both saving and investing. The formula changes depending on who you ask.
It’s not all about the money.
Actually, in this case, it is all about the money. Financial freedom might be the goal but the price isn’t just good money management skills— it requires a certain lifestyle. Consider folks who have decided to take on the FI/RE goal. In order for them to accumulate enough money to retire early, they need to allocate upwards of 50% of their current income to this goal. That’s anywhere from 30-40% more than the typical person allocates to retirement. Just think for a moment what that would do to your quality of life? My net income for example is roughly 36K a year, meaning I’d have to live off 18K a year and somehow pay my rent and buy food and keep my dog alive. Of course, it’s all about perspective— if your net income was 80K a year, you could probably live just fine off 40K.
FI/RE is just one route of many, but it serves as a clear example of how your life might change once you decide to become financially free. I’ve found less extreme life adjustments in my personal roadmap to work optional. Some of my more recent developments have been minimalism, zero-sum budgeting and the pantry challenge.
If you walked into my apartment right now, you might not think of me as a minimalist, but minimalism is not just about bare white walls and no furniture. There’s no rule book. Minimalism to me is that little voice in my head that says “you don’t really need that. You probably don’t even want it.” Case in point, this past weekend I went to TJ Max with one of my friends and my little heart sang with joy when I found a bunch of dresses and shoes that would look great on me. Then I heard the little voice saying, “Really Cat? Another dress? You have 50 dresses in your closet.” Fine. I don’t need it. With all the reluctance in the world, I didn’t get the dresses and the shoes and saved myself a good $60 bucks that I didn’t have to begin with.
The little voice was right. Those dresses haven’t even crossed my mind until I needed an example for this post. This is not to say you can’t get something that sparks joy, as Marie Kondo would say; it’s more about digging deeper and really analyzing whether something brings genuine joy or whether it’s just the fleeting happiness of instant gratification. For example, when I went to Mexico I purchased a colorful ceramic owl set that hangs on a wall in my living room. Every time I look at those owls, I’m reminded of the last trip I took with my father and what a magical time it was. Well worth my money and something that continues to spark joy three years later.
In the end, this mindset frees up my money so that I only spend it when on things which I absolutely need or want and not on a “happiness quick fix.”
The Zero-Sum Game.
This is how you play: When you get paid, you sit down and give a “job” or an “assignment” to every single dollar in your bank account. Game over.
The point of zero-sum budgeting is to allocate every single dollar in your possession so that it doesn’t go to waste, a.k.a money mismanagement. So instead of saying, “I have $100 worth of spending money,” you’d give each dollar an assignment, “$45 will go to groceries, $15 towards misc expenses (buying gum, paying a parking meter, etc), $25 towards gas, $10 for entertainment (renting a movie, buying a book, buying an ice cream with friends, etc).” Granted this method of money management works best for people who are highly organized and slightly obsessed with lists and tracking mechanisms. Some folks can get away with a loose budget and general spending guidelines, but for the slightly impulsive (pointing at myself here), having a rigid budget is a must.
The Game Changer: Pantry Challenge.
Remember when our parents used to say, “There’s food at home?” Yeah. That’s the pantry challenge. Last month I literally ran out of money one week before payday (bearing in mind I get paid monthly and it was an obnoxiously long month), but I was determined not to go over budget so I sucked it up and ate whatever was in my pantry for 7 days straight. Honestly, it was not that bad. It was a bunch of stuff that I was too lazy to make or things I was “never in the mood for.” In the end I was able to get really creative and make some meals I wouldn’t usually make and I also realized I have alot of food in my pantry that I ignore.
Another important part of the pantry challenge is to eat everything you make, meaning left overs and “not so good recipes.” Essentially, if it’s edible, I’m eating it. Again, game changer. Old Cat would have succumb to cravings and ordered food or buy more groceries with my credit card in a never ending cycle of going over budget and accumulating debt. No more. The pantry challenge has taught me that not only do I have food at home, but cravings too shall pass if you wait long enough.
The Bottom Line
I’ve noticed such a big change in myself from the start of my financial freedom journey up until this point and while I still have a ways to go, it feels really good knowing I’ve come this far. It hasn’t come without sacrifices though. Whether big or small, you have to make sacrifices. You can’t carry on in the same way you’ve been carrying on and expect different results. You have to adjust your reality to fit your goals. For some that might mean FI/RE and for others that might mean cutting out a few social outing or kicking a money hungry habit, but one way or another, somethings gotta give.