The cost of living is one everyone’s mind. 

Families are wondering how to stretch their dollars to cover the rising costs at the grocery store and the gas pump. 

Young families starting out are wondering how they will ever afford a home, or even a car. Those getting ready to retire (or already retired) are wondering if their retirement savings will hold up to the rising cost of living.

If you have been thinking about simplifying your life now might be the time to do it.

Here’s why!

The Economic Reality

The post-pandemic world is, economically speaking, a little tougher that what we have known in the recent past.

An exodus from the workplace during COVID-19 has left us with a smaller workforce. “Help Wanted” signs are swinging in the wind.

We can’t get the goods and services that we used to for the same prices we used to pay.

The cost of living has gone up, up, and up and interest rates are along for the ride.

Debt repayments aren’t as efficient as they used to be. More of your mortgage, credit card, and car loan payments goes towards the interest than it used to.

You either make higher payments to pay off the debt on time, or carry the debt longer.

Neither option is great.

Simplifying Your Finances Is Really Just Simplifying Your Life

When times get tough so do the decisions.

• You have to decide what is really important to you.
• Based on what’s important you must pick and choose what gets cut from the budget.
• At the end of the day you will figure out how to carry on with life under your adjusted budget.

It occurs to me that this sounds a lot like simplifying your life.

At the risk of repeating myself, let me reframe the points above:

• You have to decide what is really important to you. (Get clarity)
• Based on what’s important you must pick and choose what gets cut from the budget. (Choose your best life)
• At the end of the day you will figure out how to carry on with life under your adjusted budget. (Thrive)

Most people tend to start down the path to simplification by tackling their stuff, but you can start anywhere. The focus might be finances, but you are still simplifying your life.

It’s a great move to make, too! Those who are living the simple life have an edge in today’s economy.

The Economic Edge

1. You Know The Process

If you have simplified your life you already know the process you must follow to reduce your cost of living well.

You have lived it!

If any adjustments are required you already know where to begin and how start making real change in your life that will improve your financial situation.

I say “if” because there is a good chance that you are not feeling the economic pinch that your un-simplified (is that a word?) neighbors are.

Read on.

2. You’re Spending Less

Simple living leads to less spending.

When you are being mindful of your purchases you tend to eliminate impulse buying.

You have likely downsized your stuff, and are not eager to see the stash grow again after all your hard work.

Any spending you are doing is targeted to things that really matter to you.

You’ve discovered that there are way less things that matter to you than the advertisers and influencers would have you believe.

Those who are living the simple life have sorted all that out!

3. You’re Saving More

If you have read my post You Can Live Below Your Means (Here’s How) you know that, in my opinion, a simplified budgeting approach starts with saving.

The longer you have been on your simple living journey, the more likely it is that you have paid off all your debt and are saving more than ever.

Even if you still have debt, you are still saving more than most households if for no other reason than you are spending less!

Savings give you some wiggle room, if needed, while you figure out how you are going to adapt to the changing economy.

Maybe you want to sell your vehicle for something more economical on gas. Your savings will support you while you find a buyer for your current vehicle and find a better one.

Perhaps working from home could save you commute costs (and time!). Savings can buy you time while you are job hunting for the perfect work-at-home opportunity. You don’t want to feel pressured into taking just any work that comes along.

4. You Have No (Low) Debt

Once you have been living the simple life for a while you pay off any debt you held and you tend to be cautious about taking on more.

In many cases, you don’t need to.

Your simple lifestyle allows you to save up and pay cash for purchases…even larger ones!

If you have no debt, the rising interest rates don’t worry you much.

Unexpected “emergency” costs are more manageable too, because you still have plenty of limit on your credit card.

5. You’ve Already Cut The “Extras”

When you are forced into letting your gym membership go, it doesn’t feel too good. Even if you never go to the gym!

Those who have simplified lives have already cut the extras, but not under financial duress.

They had the luxury of doing it on their own terms.

They took the time to sort and sift through their lives and eliminate those things (some that cost them money, and some that didn’t) that really weren’t serving them well.

In our consumer based society it is so easy to “own” things just because everyone else does without giving much thought to whether we really want them in our lives or not.

Cable subscriptions, a cell phone, and an SUV are all things I used to pay for monthly that I have eliminated. And I don’t miss them a bit.

If further cuts are necessary you now have a discerning eye. You have practiced eliminating things from your life and you get better and better at figuring out what can painlessly go.

You also know that there are very few things that you have let go that really impacted your life. If you figure out that the impact is too great, you just bring it back!

6. Rightsized (Probably Downsized) House

Simple living is about shedding the excess and that counts when it comes to our houses too!

Every person who is living simply will be in a different sized home. Tiny houses, apartments, bungalows, townhouses, maybe even a Victorian era home. I lived in one while living simply!

What is important is that the footprint of your home matches your needs.

Housing is generally a household’s biggest expense.

A rightsized home means you are paying less rent or mortgage, less to heat or cool the home, and less to insure it.

7. Less Financial Stress

It doesn’t take very long for simple living to start to be reflected in your finances.

I have yet to talk to someone about simple living and have them say that it has caused them more financial stress. It’s always the opposite.

As a lifestyle, simple living promotes living with less and consuming less.

This naturally causes spending to decrease, savings to increase, and debt to be eliminated.

Sure, you still have bills to pay, but there are less of them.

Simple living also encourages reducing your footprint. When it is time to replace a vehicle or buy clothing or household items, it is natural to seek out used and second hand items rather than heading to the mall. This is good for the planet and good for your wallet!

8. More Time

You’ve no doubt heard the saying “time is money”.

Those who live simply, simply have more time for life.

You may think this has nothing to do with giving you an economic edge, but it does.

I have time to garden, grow food, and preserve it. This saves me money at the grocery store.

Having time to actually sit down with the sales flyers and menu plan means that it is easy to plan economical meals that are still delish!

This summer, Sweetie and I have been building a garage. Ourselves. We have the time to work away at it and learn the skills we need to make it happen. If we had busier lives we would have ended up paying a contractor thousands of dollars to do it for us.

Once upon a time, I used to pay someone to clean my house weekly. Today, I do it myself. My life is less congested than it was back then. I’ve let a lot of activities that weren’t meaningful to me go, I’ve shortened my commute to work, I’ve gotten a smaller house to clean, and there is less stuff in the house to deal with which makes the cleaning process easier.

I also used to pay for lawncare and snow removal. Now we do these things ourselves.

You may be thinking that it seems like we are adding more work to our lives, not more time to enjoy life.

In a way we are, however, we take great enjoyment out of doing these things for ourselves. With less time pressures on us we enjoy spending more time at home “nesting”.

We moved into this property in December of last year after installing cottage style prefab that is 640 square feet. Our garden, yard, and garage are all “projects” that Sweetie and I have decided to take on together and we are enjoying the process of creating our own little space in the world.

And it’s saving us a lot of money along the way!

9. Less Personal Stress

Tough economic times can be stressful.

If you are having trouble making ends meet, you are likely feeling a lot of anxiety and worry.

When it feels like our lives are already at the limit when it comes to stress, anxiety, and worry adding the concerns of how to meet today’s costs of living can seem like too much.

Simple living, by its nature, causes you to slow down and eliminate the stresses from life that you have control over.

There will always be stressors, like the economy, that we have no control over.

When those come along, those who have simplified their lives have the capacity to deal with it.

They have eliminated unnecessary stress and worry already, giving them some breathing space to deal with these new concerns.

10. If You Lost Your Job You Know You Could Survive

Many families live paycheck to paycheck. Or even a little beyond the paycheck adding a bit more debt to the credit cards or line of credit each month. I know all about it….I’ve been there.

Under these circumstances, it is always worrisome to think that your job could be eliminated or that your company might not survive the economic downturn.

What would you do without your paycheck?

There are some who choose simple living so that they can work less. They work the minimum number of hours required to maintain their lifestyle.

If they lost hours of employment they would need to replace them immediately, but they wouldn’t need many hours of work to see them through.

Many more, however, have continued to work full-time (at something they love doing) and are banking the difference between the costs of simple living and their earnings.

Thanks to their simple lifestyles, both groups have the confidence to know that if something happens to their jobs they will be okay.

The Simple Summary

Simple living has given you an edge when dealing with the cost of living:

1. You know what must be done to cut costs and how to do it. You’ve lived it.
2. You’re spending less already. You don’t need to change your shopping habits.
3. You’re saving more already. This gives you some wiggle room in your budget.
4. You have no (low) debt, so the rising interest rates don’t worry you a bit.
5. You’ve cut the extras (when not under financial duress). You have practiced eliminating things from your life and know that you can manage it well.
6. You have a rightsized home. The most expensive cost of living is already under control.
7. You have less financial stress. Your bills are smaller and there are fewer of them.
8. You have time available to you that you can use to keep costs under control.
9. Less personal stress in life gives you the mental capacity to deal with the economic crisis.
10. You can be confident that if your job were eliminated, your household would be okay.