How to Live a Fulfilled Life Financially

I recently read Your Money or Your Life, an insightful book about personal finance. I have read the book about a decade ago, but a decade is a long time so I decided to read it again to refresh my memory.

There is a concept that is emphasized again and again in the book. That concept is frugality. The book says that frugality is the key to living a fulfilled life financially and I agree with it.

What does it mean to be frugal?

Here is the definition given by the book: being frugal means having a high joy-to-stuff ratio. Being frugal is not about having a few possessions. It’s not about finding the cheapest stuff out there to buy. Instead, it’s about getting as much value as possible from your possessions. If you get a lot of enjoyment from something you own, you are being frugal. But if you barely use it, you are not being frugal.

This definition sticks with me because it makes me realize that I’m not frugal in some cases.

The most obvious example in my case is with books. I love to read, and because of that, I buy a lot of books (mainly e-books these days). There are many of them that I haven’t read, though. According to the definition above, I’m not frugal. I have a low joy-to-stuff ratio when it comes to books.

Fortunately, there are some other areas where I do better than that. With clothing, for instance, I rarely buy new ones. I prefer to just wear what I already have.

So what can we do to become frugal? Here are some tips to increase your joy-to-stuff ratio:

1. Ask Yourself: Will I Actually Use This?

Before you buy something, ask yourself: will I actually use this? Will I get maximum enjoyment from it?

In the case of books, will you read the books? In the case of computer games, will you play the games? In the case of clothing, will you wear them often?

Knowing that I have many unread books, I learn to be more careful now. Before buying a book, I ask myself: will I actually read this book? If not, I won’t buy it, even if it’s in deep discount.

2. Get the Most Out of What You Have

The second way to increase your joy-to-stuff ratio is to increase the joy you get from what you already have. Look around: what items do you own that you don’t use enough? What have you left unused?

In my case, I start reading parts of the books that I haven’t even opened before. I don’t read them in full yet (that would take a lot of time), but at least I already get some value from them.

3. Sell or Donate Unused Items

Just because you own something, it doesn’t mean that you must find ways to enjoy it. If something is not worth your time, then don’t use it. If you feel like you must use something just because you have spent money on it, you might get trapped in sunk cost trap. It will prevent you from using your time more productively elsewhere.

The solution? Sell or donate the item. Things that you don’t find useful might be useful to others. Plus, this will decrease the amount of stuff you own and thereby increase your joy-to-stuff ratio.

4. Rent or Borrow Something Whenever Possible

The book states that you don’t need to own something to enjoy it. You can also rent or borrow it. So, instead of buying an item you want, find other ways to enjoy it. Can you borrow it? Or can you rent it? This will prevent you from having more stuff.

5. Look for Things That Are Durable

The longer you can use an item, the more joy you will get out of it. That’s why price is not the only factor you should take into account when buying something. Another important factor is durability. If something costs more but lasts much longer than the alternative, it could be the better one to buy. Why? Because you will get more joy out of it over time.

***

These strategies will increase your joy-to-stuff ratio. You will then enjoy life more while consuming fewer resources. That’s a win-win for you and everybody else on this planet.