5 Stress-Free Rules That Save Me Time & Money

By | Wednesday, March 29, 2017

Life’s too short to have to worry about money all the time. But the reason you worry is because you don’t know what you want, and have to settle for either:

  • Blowing your entire paycheck searching for answers, or
  • Hoarding money in your savings accounts like Smaug from the Hobbit.

Both are desperate cries for help. In my experience, frugality can be just as problematic as reckless spending. Oscar Wilde once said that a cynic is someone “who knows the price of everything but the value of nothing.” I think of this quote whenever I read financial tips suggesting I ditch my morning coffees to save a couple hundred dollars a year.


I happen to enjoy waking up extra early and walking to my neighborhood coffee shop. Maybe sit in the sun for a half hour with a paperback before heading to work. Is that experience worth the $400-500 I end up spending a year? Absolutely.

Of course, everyone is at a different place financially, and has to do what’s best for them. But here’s the problem with the micro-budgeting mindset: you become so obsessed with streamlining everything to death, you forget that the one who’s eventually going to die is — well, everyone. Sometimes it’s the small things that make living worthwhile. To me, the purpose of personal finance is freedom, and the currency of freedom is options. I base all my important decisions on one simple formula:

Time > Money > Possessions

Time can be converted into millions of options, money into hundreds of options, and possessions into a couple of options. So what’s the goal? To minimize the amount of money and possessions you need, and the amount of time you spend worrying about the latter two. You do this by setting rules for yourself that help you hone in on the bigger picture, rules that will help you find and add value to your life whether you’re spending or saving. Here are the five rules that my wife and I follow to save both time and money.

1. Reduce your overhead: keep your rent payments under a third of your after-tax paycheck.

The 80/20 rule states that 80% of your problems are driven by 20% of the causes. Rent is that 20%. Get it right, and that’s 80% fewer things for you to worry about. Since you typically only have one chance every year to renegotiate the terms of your lease, it pays to be ruthless. Especially if you’re carrying debt.

2. Automate your money: open your checking, savings, and retirement accounts with different banks.

I firmly believe that under no circumstance should anyone open a checking and savings account with the same bank. Your checking account should have no fees or minimums, and your savings and retirement accounts should make it difficult for you to access your own money (a two-day wait period for all transfers is ideal). Next, automate your transfers.

Here’s an example of what this should look like when your paycheck hits your checking account:

  • 5-10%  disappears into your retirement account, never to reappear
  • 20-30% disappears into your savings account, only to reappear in life or death emergencies
  • Remaining 60-75% stays in checking, and is the only number you’ll ever see on a day-to-day basis

Now, service your debts and pay the rent and bills. That’s your 80% from the 80/20 rule. The amount you have left over isn’t money — it’s freedom.

3. Commit to one small routine: designate the day after your weekly grocery run as a “no spend” day.

We’re flooded with evermore clever ways to save money, which decreases the likelihood that we’ll ever follow through on any of them. Instead, focus on building one recurring routine.

Dining out is probably the second highest expense after rent and bills, so commit to staying in the day after your weekly grocery run. Better yet, get some tupperware containers, and cook enough to get you through the next three or four days. It’ll make you more thoughtful about your grocery purchases as well.

4. Curb your impulses: designate one or two days out of the year for big ticket/luxury purchases (i.e. nonessential clothing, shoes, and electronics).

No amount of caffeine-free days and ramen noodles will save you from those status-seeking luxury purchases charged to your credit card at 2 in the morning. Don’t get me wrong — it’s okay to treat yourself. But none of us is special enough to deserve a treat whenever the impulse strikes us. The reasoning for this rule is simple: you’ll be more reluctant to drop three grand over a day than three hundred over ten days.

If shopping online helps you relieve stress, then go ahead and browse away. Fill up that digital cart. But you only get to pull the trigger once. I’d recommend having that day towards the end, of the year because that’s when:

  • The best deals can be found
  • You’ll have actually earned it

5. Invest in yourself: 5-10% of your savings should be plowed back into your education

Financial independence is great, but in life, it’s more of a prerequisite than an actual major. Your major should be finding ways to add value to your life and the lives of those around you. The best way to do this is to invest in yourself. This doesn’t mean you should sink further into debt to get another college degree. Remember, freedom is about options, and debt decreases your options at a compounded annual interest rate.

Besides, credibility can sometimes be overrated. People think it can be bought (as a “resume padder”) rather than earned through the sweat of real-world experience. In the digital age, there are hundreds of options allowing you to try new things and further your education. This is your chance to test the waters before jumping in with both feet.

Because that’s what it means to be alive.

Jennie and Ivan are a twenty something couple based in Los Angeles. Together, they run a simple living blog called The Origami Life. It tracks their progress to September 2018, the month they plan on selling their worldly possessions and embarking on a global search for the simple life.

Image via Unsplash

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