Throughout the Saving Series, I’ve reiterated the importance of reducing your expenses. It’s easy to spend more than we need to, and that spending is often our undoing. Modern life (and all of its many distractions and pleasures) makes it difficult to understand the psychology of “enough”.
Excessive spending is the ever-present threat preventing you from beginning (or succeeding in meeting) your saving goals. The only way to undo this is to understand what your “enough” is, and work to keep your spending within its range.
Welcome to the Saving Series. Today’s focus is on how we can use the psychology of “enough” to life a good life, save the rest of our money, and create the means to improve our circumstances.
Without understanding what “enough” means to you, acquiring more money becomes the only thing that matters. If you don’t know what you need to thrive, prioritising and understanding your spending becomes impossible.
Thankfully, there are a few ways you can find your “enough” and live how you desire.
What Is the Psychology of “Enough”?
When I say “Enough”, I’m referring to what we need to live a healthy life. We have “enough” if we can support our physical, mental, emotional, and spiritual needs.
“Enough” isn’t the bare essentials to ensure you are fed, clothed, and bathed. “Enough” is whatever you need to live a happy and healthy life:
- The weekend brunch catch-up with your friends
- Savings to cover annual international travel
- Quality time with your loved ones
I can already imagine reading this and thinking, “But Scott, you don’t need any of those things to survive! How are any of those things needs?”
It’s simple:
Everyone’s “Enough” is different.
The Wants We Need
Sure, you or I may not need to go out for Saturday brunch. But I can’t say that nobody needs it.
A brunch tradition or other spending habit may have a larger purpose than just the things consumed.
For example, perhaps a person visits their friends for brunch every Saturday. Maybe they work full-time, and it’s the only time they can get out of the house and away from the kids. This is their outlet to unwind after a week of work, and they know that they become more stressed without it.
The brunch serves a secondary purpose: socialisation and emotional relaxation. They don’t need the brunch or the food itself. But they do need a safe environment, away from home, where they can relax and have fun with friends.
When reviewing your own spending habits, look closely at what you spend your money on. Consider not just what you bought, but also why you bought it.
Maybe our brunch-lover could make a toasted sandwich at home and sit in the park with their friends. Maybe that’s “enough” for us. But who are we to say that that’s enough for them?
I’m sure that you’ve made plenty of intentional purchases. But chances are you’ve bought things thinking you needed them when you didn’t actually need them.
It’s very easy to spend money if you don’t put guardrails up to stop yourself from doing it thoughtlessly. And it’s difficult to train yourself to spend less if you genuinely think you need everything you buy.
The focus becomes whether or not you can afford to buy everything you “need” while meeting your saving goals.
What Do You Want?
Do you want a flashy car?
Or designer clothes and accessories?
How about dining out every night at fancy restaurants?
People usually want these things because society tells them they need to have these things in order to get what they want. This makes people believe that car loans and designer goods are needs, rather than wants.
For some, the items themselves are just a stepping stone to actually getting what you want.
It’s surprisingly easy to project the illusion of a lavish lifestyle too. All it takes is an expensive loan and Afterpay.
I imagine bargaining with this type of spending looking like this:
Do you want the things themselves, or do you want the benefits that come with having those things? Because in many cases, you don’t need the thing to achieve the outcome you want1.
Appearing wealthy because of your flashy possessions will likely attract attention. And using your money to project an appearance of wealth is also extremely dangerous. But you have to decide if it’s attention you want.
Not only does it make you a target of theft or envy, it’s a downward spiral that traps you on the Hedonic Treadmill. Run on it for too long, and your only goal is earning more money to buy the things you think you need.
Taken to its extreme, everything in your life begins to be valued based on “how much money it makes or loses”. It’s not even about “want” or “need” at this point. It’s simply running and running to make sure the bills are paid and you can buy what you want.
Overcoming the Psychology of “Enough”
It’s important to understand exactly what “enough” is for you. Delusions of spending everything you have just to project a certain lifestyle will lead to disaster in the long term.
If you’ve been spending all of your income on excessive consumption until now, it’s difficult to unwind that cycle. Getting back to a baseline level of enough requires commitment and sacrifice. But it has to be done if you want to achieve your financial goals.
If you’re trapped in a cycle of earning and spending with no end in sight, how do you get out and begin saving? How do you overcome the psychology of enough?
Sacrifices Must Be Made
If you want to get your financial health back on track, you have to make sacrifices in the short term. It doesn’t matter how you slice it – your spending has to be cut in order to give yourself the freedom to save.
If you’re trapped by expenses and can’t find a way out, you only have two levers to pull:
- Earn more.
- Spend less.
One is much easier to pull than the other.
Reduce your expenses as much as possible. You have to find a way out whatever it takes.
You May Not Get Everything You Need
The downside of making these sacrifices is that you may be giving up things that you need. Unfortunately, there is no alternative to this.
You may have to go without some of the things you “can’t live without” in order to improve your situation.
Analyse and prioritise your spending on the things that best serve your needs. Everything else must be cut.
Yes, this is a terrible scenario. But if your alternative is bankruptcy, you have no choice. If you have to pay off debt, keeping expenses as lean as possible is the only way forward.
Remember that if you’re in debt, this should only be temporary. You won’t have to live like this forever as you won’t deliberately be getting into more debt.
Adjusting your “enough” is sometimes necessary to build your financial foundation.
But through that process, you may realise that going without isn’t so bad after all.
Finding Your “Enough”
The purpose of saving isn’t to deprive yourself. It’s to protect yourself.
Reducing consumption directly allows you to save more. And it’s possible to do this in a way that doesn’t make you unhappy.
Don’t Cut It If Doing So Makes You Miserable
Unless you’re really desperate (which is a different matter), reducing consumption shouldn’t make you miserable. In fact, it should energise you.
The point of doing this isn’t to suffer, it’s to live in a way that allows you to thrive. If a morning takeaway coffee is essential to avoid suffering and you genuinely have no alternative, get the coffee! The things we consume offer more to us than just what the item is.
A coffee alone may perk you up in a morning. But during the work day, maybe it’s a way to connect with co-workers or your boss. In some scenarios, this may lead to opportunities in the future.
Ultimately, you decide what matters and what enough is for you.
Do What Makes You Happy (But Be Realistic)
As I mentioned above, you can choose how you approach finding your enough. But you have to be realistic about it.
Holding onto a level of spending that isn’t sustainable won’t do you any favours. Rather, it’ll continue to make living a well-rounded lifestyle more difficult the longer it goes on.
Be honest with yourself when challenging your spending. It’s easy to not take action and continue consuming as you are. But making small changes allows you to build flexibility into your budget without feeling like you’re going without.
Suffering isn’t going anywhere, and we will encounter it in our lives. Doing our part to live with a little less can allow us to appreciate the things we have even more. And if tragedy does strike, it might be a bit easier to handle financially (and mentally) if your expenditure and desires are lower.
Closing
“Enough” is different for everyone.
And the benefits of reducing your consumption cannot be understated.
I believe we can all benefit from consuming a little less, and redefine our “enough” in the process.
The Monk and the Minister parable popularised by J.L. Collins2 is a great reminder of this:
Two close boyhood friends grow up and go their separate ways. One becomes a humble monk, the other a rich and powerful minister to the king.
Years later they meet. As they catch up, the minister (in his fine robes) takes pity on the thin, shabby monk. Seeking to help, he says:
“You know, if you could learn to cater to the king, you wouldn’t have to live on rice and beans.”
To which the monk replies:
“If you could learn to live on rice and beans, you wouldn’t have to cater to the king.”
The Monk and the Minister – as popularised by J.L. Collins
Freedom is attained through having enough, earning above your enough, and creating the space to invest in your earning potential and future.
How easy your “enough” is to achieve will affect every aspect of your journey to freedom.
Thank you for reading.
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- There are certain scenarios where displaying affluence (to an extent) is not only encouraged, but required. Exercise caution and spend wisely when entering these circles. ↩︎
- While the quote features as part of J.L. Collins’ site (and book), Collins himself confirmed that the parable was not created by him. ↩︎