I have been on vacations for the last four weeks. While the first week was still pretty stressful due to a few family and work matters, the second week was already very relaxing. I spent some time at our inherited house in the north-east of Thailand. A peaceful and quiet place.
Extremely low living costs, usually filling a table full of food for less than 10 Euros at today’s exchange rate (1 Euro = 37 THB). A small Thai herbal sauna just in front of my house. A visit there costs only 50 THB which is not even 2 Euros. This includes the sauna visit and free of charge herbal tea – all day long. There is a nice public park for about 5 min. by car from my house, where I can go exercise every day, with a nice lake to run around, pull-up bars, a basketball field, soccer field and some machines that can be used. There is also a nice playground which is great for kids. After exercise, I can take a 2 min. ride to the local market where I can get a freshly pressed carrot-apple-lime juice for 20 THB. Roughly 0,60 Euro. A portion of steamed chicken breast with some rice and a chicken-broth-soup costs 40 THB. A little more than 1 Euro.
Why do I list all this? Very simple: I could have a very simple and actually good life in this place for probably less than 15 Euros a day – for my whole family. That’s 450 Euros a month. We inherited the house so there is no rent to pay, but even if I would rent a place it would cost not more than 200 Euros. For a 2-3 bedroom house or apartment, with a bathroom, garage, garden and garbage pick-up.
Keeping living costs low
The secret to success for most people is not about how much they earn, but about how much they spend. Having a high paycheck won’t help you if you are not able to manage your expenses. Living frugally is an essential part not only to become financially independent but also learn to enjoy a simpler life.
Basic living expenses play a key role in the entire structure. As we know, many people around the world use the majority of their earnings to spend on basic living costs. Rent, water, electric, food, transportation, education, and medical costs tend to eat up very large chunks of distributed salaries. Therefore the logical conclusion for most should be, that in order to be able to save more, one should try to reduce those costs as much as possible. Living above your means is a sure way to end up broke. Living below your means, however, will unlock the potential to save and to invest. Thus, building wealth.
There are plenty of blogs that teach people how to live frugally and I follow a few of them. I can always find some idea and some tips on how I can squeeze out more opportunities to save, without having any significant impact on my lifestyle. So while I don’t intend to make my blog about this, here my top 5 tips that I think can make a huge difference:
- Move to a low-cost area – This is probably the most important one. Living in an area where costs of living are low can have a tremendous impact on your ability to save up money. This does not only refer to the rent for your house, but also to such basic costs like groceries, coffee-shops, etc. If your profession offers the flexibility to move around, you certainly should consider moving to a place where you just get more value for your money.
- Ditch things that you don’t need – or declutter your life. Memberships, online subscriptions, insurance policies… you really got to review it all and consider which service brings real value to your life and what you consider necessary. For most cases, less can be more.
- Embrace minimalism – or declutter your life even more. I am sure I quoted this at some point on my blog already, but many people live their lives by buying things they don’t need, with money they don’t have, just to impress people who they don’t even know. It’s not necessary. You don’t need to have an expensive car. You don’t need to follow every new trend and to always be up to date – especially if you need a credit card to make it possible. Having less will free up your mind, your time and let you focus on the things that really matter. Like your family, or going for a run (instead of the gym). And when was actually the last time that you just laid down on your back in a field or on a lawn and watched the clouds passing by in the sky?
- Learn about taxes and benefits – A few things in life are certain. One is, that we all have to die. The second is, that we all have to pay taxes. However, while we still can’t control the first point, paying taxes is not only a burden but it also opens up some benefits. While some, such as a schooling system for your kids or basic medical care, are more obvious, other benefits are hidden and not in plain sight. So no matter where you live and what you do, it makes sense to spend a few days a year to learn about things that you are entitled to, and how to benefit from them. Ask around your friends, google it or maybe invest a few Euros to seek the support of a professional. It may be worth it.
- Re-evaluate your priorities – We all have our routines. Things we do, because we always did it. Things we do, because that’s how we grew up. Things we like to do because that’s what we identify ourselves with. Chances are, that those things do cost you money, and chances are even higher, that there are tons of things you might not know about yourself. Try to do new things. Explore your own abilities, interests and challenge yourself with things you never thought about or considered in the past. It’s not just about saving money, but also about developing yourself, expanding your horizons and finding new opportunities along the way.
Early retirement is possible with some sacrifices along the way
I am planning for early retirement. However, as I stated a few times, this won’t work without a few sacrifices. FIRE is not for everyone, because it requires a lot of sacrifices that many are not willing to take. However, living frugally is not one of them.
Living frugally, embracing minimalism and learning to be happy with less, will most probably contribute to a better and healthier life. It will reduce stress, pressure, costs and help you to turn into one of those people who are endless optimists. Because of the fewer things you own, the fewer things you have to worry about. And in today’s world, this is a huge burden taken off your chest. You should give it a try.