Saving a high percentage of income as a path to financial independence has received a lot of recent attention in the press. I love that this crazy idea has almost become a movement, changing lives for the better.
Due to the publicity I’ve had the good fortune to meet several strangers who have become friends, thanks to the common bonds of world travel and financial wizardry.
However, I have a confession to make: I have more in common with the detractors. I actually really suck at being frugal.
If there ever was a quote that captured my personality, it would be:
“I can resist everything except temptation.” – Oscar Wilde
“Hey, Jeremy, want to go out for sushi?” – Sounds awesome!
“We are going to see Random Famous Singer perform at the Random Famous Theater, want to join?” – Do I ever!
“Ever been to Greece? Want to go?” – Sounds magical!
To combat this complete lack of willpower or self-control, I resorted to lifestyle design.
Lifestyle Design
I believe I first came across the idea of lifestyle design in a Tim Ferriss book, The 4-Hour Workweek.
The main idea is to actively design one’s life such that it is extremely difficult to engage in behaviors that are detrimental or undesirable. If you don’t want to eat 2 whole pints of Ben & Jerry’s Karamel Sutra ice cream tonight, don’t keep 2 whole pints in your freezer. (I later used the concept of lifestyle design to address my tendency to over-indulge with the sweets, nom nom nom.)
We applied this concept to The Big 3 core spending categories (transportation, housing, food) while we were accumulating our nest egg, and the results speak for themselves.
Transportation
Some people are naturally frugal. I’m naturally lazy. (Just ask my wife.)
After a long day of work, who wants to hop on a bicycle or wait on the street corner for a bus? Not me, I’ll drive, thanks. Oh, it’s raining? I’ll drive, thanks. That meeting is 100 meters away in another building? I’ll drive, thanks.
Funny thing… if you don’t have a car, it becomes impossible to drive.
So I sold my sweet ride and 3 things immediately happened:
1) I stopped driving
2) I started biking
3) I saved beaucoup bucks
And then I discovered… driving really sucks and biking is a real joy.
“Riding a bike is the closest you can get to flying” – Robin Williams
By removing the option of driving my entire life improved.
Housing
I’m fairly certain that most city planners have never heard of lifestyle design. Without a car it can be downright difficult to get from point A (where you live) to point B (where you work) or even point C (grocery store, library, park.)
“It is impossible to not have a car where I live,” said everybody.
I used to think this too. The house I bought when I first moved to Seattle, besides being a poor financial choice, was a form of negative lifestyle design. I was locked into a location that required an automobile lifeline and a lifestyle that was high cost / low value. I was living the American Dream!
But there is nothing as motivating for finding a new place to live as a 90 minute bus ride (if you make the first transfer, unlikely) or a long bike commute.
But with a very deliberate and conscious search we found the ideal location.
Now I had:
1) an easy bus commute
2) an easy bike commute
3) big savings
Food
What could be easier at the end of a long work day (and hunger inducing bike commute) than to pick up some take-out and veg in front of the television?
Unless you don’t own a television. And you already made plans to meet friends for a picnic in the park.
Sunset Picnic in Seattle
Social obligations and elimination of lazy “entertainment”/consumption options are great examples of lifestyle design; there is literally no way to screw this up. I know, I tried.
A local CSA sourced most of our picnic and home-cooked dinner party ingredients. A super-sized box of produce was delivered weekly and we were committed to not wasting one bit (I still have no idea what some of those vegetables were.)
Another key aspect of actively designing a lifestyle is skill development. Winnie at one point decided she wanted to explore her passion for cooking. Not long afterwards, the best meals in town came out of her kitchen (Winnie’s fav cookbook) including home baked bread (seriously, mmmmm), home made kimchee, home made kombucha, home made preserves… you get the idea.
Other Design Choices
Once we started making conscious choices we made better choices in other areas of living and spending beyond the Big 3.
Whenever our first thought was to spend money, we took a moment to pause and ask, “why?” Why not get “crazy” instead?
As such, our wedding and honeymoon were both basically free. Our 2nd honeymoon to Hawaii was also basically free.
We figured it out a bit at a time through…
Experimentation
Often when people say, “Oh, I could never do that”… what they really mean is, “that seems different and I don’t think I would like it.”
And that may be true. Maybe it will be worse than you can even imagine. The worst. Terrible!
Or not.
When we first downsized, we moved into a 400 sq. ft. apartment in Seattle’s International District (Chinatown.) It wasn’t nice. We definitely did not like it. Friends were confused… “You live… here?”
But no big deal, we just moved again. After a few months in a smaller space, 900. sq. ft. felt ENORMOUS! It was too big. We now routinely live in much smaller places. We grew as people and discovered we could thrive by living large in a small space.
Comfort zones need to be routinely tested lest they become a prison cell.
Summary
Owing to several deficiencies in character and constitution, lifestyle design was the best option for us to successfully save a high percentage of income.
Through trial, error, and experimentation, we arrived upon a way of life that incentivized both saving and personal growth. In short order our comfort zones shifted from “I could never do that” to “I can pretty much do anything.”
For naturally frugal people where saving money is easy and joyful, this may seem silly or unnecessary. But for people who wage constant battle with their basest self, this may be one way to a brighter future.
I close with one final quote:
“If one advances confidently in the direction of his dreams, and endeavors to live the life which he has imagined, he will meet with a success unexpected in common hours.” – Henry David Thoreau
Has Lifestyle Design improved your life?
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You are also an instigator:
–Hey, Jane & Jim, want to go to Taipei and out for the best dumplings in the universe?
–Do we ever!
I haven’t found a solution to this one, sorry.
At least I was right! :)
Yes, yes you were
Funnily enough, this article comes on the heels of me moving into a studio apartment. My main room is 12’x13′. I have no countertops. All of my stuff is in boxes and looks like an episode of Hoarders. This is the literal definition of Not Fun. But, I am close enough to Aldi I can ride my bike, and I have zero housing costs. In the end it will be worth it.
Woohoo, adventure! #livingthedream
Jeremy:
This is a great post. People want a quick ToDo list on how to save money, or retire early. But, the method of Lifestyle Design is the key, since you can apply it to so many areas. I need to apply Lifestyle Design now with regards to my time. I need to improve my time management. I have proven that ‘on my own’ it is a constant battle, that I am losing. I need to change my environment, forcing myself to do the right things.
It worked for me also with transportation. I sold my car 3 years ago, we have been a one car family during this time, with no issues, and a pile of additional cash in our retirement accounts!
It’s pretty amazing, 3 years ago I ‘woke up’ with regards to finances. That first year there were a lot of changes, but now the next 2 years are mostly on auto-pilot. Yet, we continue to save money, and enjoy life. Thanks again!
– The Tepid Tamale
Nicely done!
Sort of similar to the concept of automatic savings before money hits your accounts to remove the excess funds you might want to spend. It’s easier to hit your goals if you remove the underlining capability or motivation to do so, removing the choice makes it much easier. We use that auto savings method for most of our controls. I’m hard wired to not go into debt or spend what’s already saved, so the pure aspect of not having the cash in my checking account keeps me in check.
Indeed, automatic contributions to savings and retirement accounts are good examples of lifestyle design in action.
It reminds me of implementation intentions (like an if-then plan). Except that the if-then plan is more like what you’ll do when a situation arises. We’ll definitely need to redesign our lifestyles after retirement since we’ll have less restriction as far as time is concerned.
The if-then clause didn’t work so well for me. If there is ice cream in the house, I’ll eat it, no matter my original intention.
Yes, I mostly apply it to outside circumstances. If there’s ice cream in the fridge I’d eat it too! ;)
The funny thing is, while it can be uncomfortable at first, you adapt to enjoy that kind of lifestyle. We never thought we could live comfortably on less than 60k a year. Now we are perfectly happy living on less than 40k a year. We don’t have to work and still get to do all the travel we want :)
Yeah, for some weird reason we humans don’t seem to like change, but we are marvelous at adaptation. So suck it up, make the big changes that will enable the lifestyle you want, and before you know it you are thriving. Removing the J.O.B. definitely makes that easier :)
When we left NY people warned us “You’ll never be able to return! Property costs too much!” to which we replied,”Who cares? We don’t want to return”. Without much effort we cut fixed living expenses by almost 50%. Our character deficiencies also work well with this lifestyle design as we have fewer options to spend ludicrously on fun. Even little things like no tolls and no parking fees at parks add up to big savings.
NY and SF both seem to have a weird cult following, as if life is automatically better because you live in one of those 2 cities. I suspect Stockholm Syndrome is a factor
There is something to living in great cities. We’ve lived in Sydney, Tokyo, Hong Kong, London, Chicago, San Diego and the Bay Area. While there are certainly cheaper places in the world to live spending time living in the great cities of the world has its merits. Not for everyone and not necessarily for always but our lives have certainly been richer for the time we’ve spent in those locations.
I also tend to over-indulge in sweets, so I stopped keeping them in the house. I try to only eat sweets that I’ve made myself–which means I have to get off my butt and actually make them. I love how you’ve designed your life for maximum positivity. :)
I tried the make it yourself rule, but who is going to eat this whole batch of chocolate chip cookies?
Winnie thinks I’m weird because I considered eating 3.57 croissants/day in Paris so I can try all of the Top 10 award winners for the past 5 years. I think she is just jealous that I can eat so much and still stay so svelte ;)
Couldn’t have said it better myself!. I started biking to the bus stop for work almost 4 years ago, and its amazing how biking can lead to major positive changes in other areas of your life.
Stafford
Awesome. The bicycle is an incredible builder of wealth and health
I think that a 900 – 1000 sqft dwelling is ideal for two people. We purposefully chose to live close to work, in an area where things you need are within a short distance ( grocery, hospitals, liquor stores etc).
Re “The American Dream” – When people have to deal with an one hour commute, no wonder so many are angry and stressed out, and engage in road rage..
We are in about 900 sq. ft. now in Taipei, and it seems too big.
Something I forgot to mention in this post… choosing to live in a smaller space is a good bit of lifestyle design. The smaller space encourages us to go outside and play instead of sit inside and veg.
Commuting gave me road rage. That is a big part of why I dislike driving.
Very true! Here are a couple other smaller examples I thought of while reading the Big 3:
a. Buying less “stuff” = less cost to clean, repair, pack and move said stuff
b. Buying less wool, cashmere, and other fancy fabric’d clothes = less dry cleaning costs
Great examples! I don’t think I’ve ever paid for dry cleaning in my life.
Lifestyle design has been part of our plan even when it was unintentional. We’ve always lived within a few miles of work, so our commutes were minimal. We kept our transportation expenses low by driving two trusty used cars for twelve years. We always enjoyed our own cooking, and we eventually got tired of eating inferior and expensive restaurant meals. How do you beat grilling out at rock-bottom costs with unlimited red wine?
During our last year of employment, we worked an intentional lifestyle design plan. We had a $500 apartment near our job sites, low utilities, ate mostly at home, and saved like crazy. The plan worked perfectly: we lived on about $1,500 a month and saved about $10,000 a month on our fat-cat, teaching salaries. Lifestyle design works.
We’re currently carless, homeless, jobless, and FIRE’d as heck. We’ll be going to Mexico in a week to set up our 2017-18 living arrangements. Like you guys, we’ll be using our travel rewards to keep the costs low. Great post. Ed
Awesome! For us, geographic arbitrage is another key component of our lifestyle. When expenses have been running high we can just spend the next n months in a lower cost of living country. We lived really well for almost no money in Mexico.
Agreed, hard to beat unlimited red wine. We are big fans of the Bota Box.
“Comfort zones need to be routinely tested lest they become a prison cell.” Loved this line.
Lifestyle design is what I am actively working on right now. We have our investments all set, we have a date on the horizon. But now that I have the one big goal, I find myself looking at the rest of my life and wondering “What about you? Can I somehow optimize you too? If I can be so bold as to retire early, what makes you sacrosanct? How would I change this if I allowed myself to question it?”
That’s a fantastic quote. I googled it to see if it were anywhere else, but it seems to be original. Well said!
Thanks! I’m sure somebody has said it better, but I like the visual I get with this phrasing
Ha, love it!
Warning: lifestyle design may be addictive :p
We’ve worked on this in the past few years and it seems to be working. It’s so much easier to change your environment than it is to constantly be battling the temptation.
It’s something we were laughing about on our 9 mile run this weekend… It’s amazing how your perception of distance changes when you’ve run all the places you usually drive. Adaptation is a wonderful/dangerous thing.
This also reminds me of the same principle taught in David Bach’s “The Automatic Millionaire.” Namely, things are more likely to happen if they’re automated or already set up to achieve an objective. Making inertia work for you instead of against you. Thanks for the post! I’ve only recently discovered you blog, but have already found it to be a treasure.
You are spot on when people often say: it is impossible for because of this and that. Often this is funny as it is possible for us, and we have a similar situation.
Keep doing what you do is just easier.
We try to design our life to make us happy now while helping us to reach FI. Me taking the bike and train, no designer clothes, live in he house we need, not the one we can afford…
Well done.
I also like the Henry Ford quote, that goes something like: whether you think you can or you think you can’t, you are right.
I imagine most people who achieve their goals just accepted early on that anything was possible.
I like this idea: it goes into the same direction: impossible is a state of mind.
Awesome post. We’ve just purchased a larger home but that doesn’t mean we can’t make some decisions to make driving harder (maybe hiding the keys, or parking the bike/scooter BEHIND the car in the garage).
Just left a VM for the local CSA, too.
Two out of three ain’t bad.
I hope you like the CSA. It was always fun to open up the big box and see what was harvested that week.
I like the bicycle parking idea.
We moved to 1642 sq ft house last year with <1 mile walking distance to hubby's work, kids school, library, new playground, 3 grocery stores, 2 farmers market in summer, bike paths, hospital, dr and dentist, etc. We are now doing test run too see if we can go down to 1 car (many days have proven we don't even use 1 car, let alone the excessive 2 paid-for cars we own). Previous home had us driving EVERYWHERE. We are so thankful for this lifestyle change. We are healthier for walking and wealthier.
I wish I could have retired at 30! or even 40! I think I will be lucky to retire at 70! I read your blog with envy, but I also love every second of it!
Backpacking groceries: Eliminates poor value grocery items, combines and gives purpose to exercise, decreases blood glucose, increases insulin sensitivity, reduces body weight, saves transport fuel, family activity for some; saves money. My grocery shops, minutes one way: 1 x 20, 1 x 30, 4 x 60, 3 x 75. Each trip provides food for ~ 3-4 days.
This is great! If you can’t carry it you can’t buy it.
We do something similar with our backpacks. Since we don’t have a permanent home to store stuff, we are careful about what we acquire.
The human ability to adapt to new environments is truly an amazing thing isn’t it? What you’ve done with your “lifestyle design” is alter your environment to one that ‘created’ your financial independence. A rather brilliant idea, in fact.
Next, the internet police are going to wonder if you just created a lifestyle that wasn’t comfortable long term. “Unsustainable” they might say.
I highly doubt that’s the case, but you know how it looks — you guys are constantly on the move, like some kind of modern gypsies.
Would you have been comfortable living that lifestyle until you were 80 years old?
Sure, we would do it forever even. The only challenge might be living on the 3rd floor with no elevator once the knees go.
I think it would be a mistake to assume our life was uncomfortable. It was great. But our goal was to live our current lifestyle, which required ditching the job.
It is also bizarre to me that a savings plan needs to be sustainable. Life itself ends, why can’t a savings plan?
Your example of meeting friends at a park reminded me that it is very important to surround yourself with like-minded people. I would’t recommend kicking out from one’s life people living more traditional lifestyles but I see that overtime I have less to share with them, even when their friendship is still important to me. What a pity.
In part this is why we have always been fairly open about what we are doing. If you share your values it creates the opportunity to attract people with similar values
Jeremy thanks for giving a name to this behavior. I am an abstainer rather then a moderator. For me it is easier to abstain from Ben & Jerry’s then to eat “a serving”. Thus I abstain most of the time and have a cheat day once a week so the abstaining doesn’t start to feel like I am cheated. I do that with food, but being frugal with money never feels like abstaining. Saving money feels like eating ice cream to me. It is spending money that makes me a little crazy. Anyway, best wishes..
Wait, a serving isn’t the whole pint?!
I do the same thing. 6 days of abstinence and a day of anything goes.
Thanks so much for this article. An an inherently lazy person as well, with the best intentions of savings and lifestyle changes, I needed your tips and tricks. My bike is the most talked about but least driven vehicle in our house. Can I get the guts to get rid of the car blocking it’s path out of the driveway?!?
Absolutely. You can do anything :)
I’m 43, and I definitely had to re-design my lifestyle to meet ‘my inner musts’ and not ‘societal shoulds’. I sold my car and downsized to 320SF (with my husband). We bought a furnished ‘condotel’ (condo in a hotel building) for only $41k, cash. All of our housing expenses (internet, cable, utilities, HOA, etc… ) cost us $400 per month. Taxes are only $1300 a year. We can pick up for extended travel any time we want and rent it out furnished. I know this is not a lifestyle for everyone, but for me, I need to feel free, unencumbered, mobile, etc…. Selling the stand alone house and the car was the best thing I ever did to re-design my life!
We saved on the Big Three too. Cheap house, old but reliable cars, and cooking all meals lead to major savings without much compromise. We play volleyball with friends for fun/socialization. It’s cheap entertainment and exercise too!
Great article, as usual, GCC. I’ve got some hard decisions to make myself on how quick I want to expedite this. I have generally been pretty good the last 2 years and saved 41k between a traditional IRA (didn’t have access at the time to a 401k) and taxable brokerage account, paid off all my high interest debt (~15k), lost (laid off) one job and gained another. I did buy a new car, and you have now (after two years of happiness about it) successfully helped me to regret my decision. It’s a low interest loan and I could pay it off. I could also sell it but I do enjoy the car being a car guy and all. If I sold that, with it’s 600/month payment, my expenses would be reduced to ~2200 month. (Student loan, food, entertainment, housing, transportation, even though I would have to shell out about 5k-7k to fix my other car, etc.)
I could probably drop that to about 1600-1800 if I could stop eating out and going out with friends. (~300-400/month for food and 200 budgeted for “entertainment”) Do you have any suggestions for giving up the takeout habit? I really despise cooking. Anyway, as always, I really appreciate you sharing your experience.
‘takeout habit’ – Start: 1 ingredient, 0 step meals; frozen peas & maize. 1 ingredient, 1 step meals; omelette, boiled egg, frozen peas with balsamic vinegar. … work up to 3 ingredient, 3 step meals; see ‘3-ingredient-recipes’.
Thanks Bullockornis.
I’ve tried the rice and beans method and never feel fulfilled. I’ve tried the frozen meals and they are just always awful. I guess I’ll keep experimenting.
There are unlimited resources on the Internet for making simple meals in crockpots. It basically requires no time/skill/effort, just turn it on and it is ready when you get home from work.
Or alternatively, I like the 4 Hour Chef. Once you get to Recipe #2 you have the ability to make a basic meal that require no time, but with spice combinations that make it varied and interesting. Generally speaking, when people despise something it is often because they aren’t skilled at it. Conversely, there is joy to be found in growing and skill development.
Thanks GCC. I’ll definitely look into the 4 hour chef. I can partially agree that I’m not skilled at it, plus it doesn’t help I’m extremely lazy.
People, in genera,l would save so much money if they just tried. Instead, they just say they can’t do it and don’t even try. And then you have to sit quietly while they complain they have no money, and you just transferred a butt load of money to your IRA. *sigh. Maybe someday they’ll get it.
I’ll need to read 4 hour work week again. I couldn’t get through it the last time I tried.
We’re doing pretty well with lifestyle design, but still have some weaknesses. Food is definitely one. We eat relatively healthy, but Mrs. RB40 likes to bake. We always have cookies, lemon bars, cake, and muffins in the house. It’s tough to say no when these things are just calling to you. Luckily, I’m still young enough to exercise…
Saving money is so much easier than eating right. CSA sounds like a good idea, though.
Thanks again, you guys have been inspiring us! Last year we sold everything and retired.. at 39 and 44 with 2 kids! We now travel in our motorhome.
Wonderful!
I love this. I think we’re very similar. I’m not frugal at all but through lifestyle design I still save about 2/3 of my total income. As long as you can avoid lifestyle inflation and enjoy the life that you have, you can save a lot of money quickly. I just lessons on patience in the craziness of corporate life. 10 years and a day ;)
I think the Big 3 is the key to Big success. I tried cutting out the ‘latte’ factor items but the value to me vs savings wasn’t worth it. But changing the Big 3 will reduce my budget by 80%.
The Big 3 are definitely key.
I love this post. I usually say I deliberately choose to live my life a certain way. Lifestyle design sounds way better. If the only clothing store I walk into is Thrifty Shopper or Goodwill then I can still poke around and even if I give into temptation I spend less then $20! I saw comments about cooking. Check out my love affair with my crock pot! http://www.mylittlebluekayak.com/my-love-affair/#more-698.
I am hoping to join the biking to work crew when we finish building our house. I’ve already mapped out my 6 mile route through neighborhoods and on country roads. Even if I can’t bike every day, my commute is very short. My husband has a longer commute (35 min. drive), so I don’t think we could give up our cars yet.
How do you cover your health care in the US?
With two kids, we are afraid that if we move back to the States our expense would double because the money for healthcare. We are currently live in Taiwan where it has very good and cheap national care. Even it’s of pocket (w/o insurance), unlike US, it is still very affordable.
The cost of health insurance (and health care) in the US is highly dependent on income and/or the quality of the employer. See this post for details on how to manage income to get best insurance rates.
The Taiwan health system is great. They deliver quality care at reasonable prices.