Personal Finance

Happiness comes from keeping it simple

“Frugality is one of the most beautiful and joyful words in the English Language, and yet… the consumption society has made us feel that happiness lies in having things and has failed to teach us the happiness of not having things.” – Elise Boulding

A couple of weeks ago I was listening to Jian Ghomeshi interview Dave Chilton on CBC Radio One. Chilton is the author of the bestselling books “The Wealthy Barber” and “The Wealthy Barber Returns” and the most recent addition to the cast of “Dragon’s Den”. I’ve been fortunate enough to meet him several times and have always been struck by how down to earth he is. During the interview, Jian commented on the fact that Dave lives frugally and Dave acknowledged that he deliberately chooses to live a very simple life and that he has an aversion to “stuff”. This choice to live simply and live well not only makes him a “happy guy” it also means that he has more money available to invest and more available to give away to charity. He commented that, in his experience, much of the debt that people carry nowadays is because of overspending on lifestyle expenses (eating out, vacations, furnishings, etc.) and that a lot of the people who enter retirement with a high degree of financial security are those who choose to live within their means, often in a more modest home than their income will support. His observations echoed patterns that I see among my clients and friends and got me thinking that if, as a society, we placed more value on accumulating wealth than accumulating “stuff” we might all be much happier, both before and during retirement.

Living beyond our means

It seems that too often people fall into the trap of feeling that they need to show tangible (and preferably visible) proof that they are “successful”. Retailers and advertisers are more than happy to reinforce this misconception with carefully crafted campaigns which remind us that we deserve the biggest and the best, and lenders are more than happy to help us acquire it. A few decades ago it was much harder to live beyond your means; people paid for purchases in cash, not by debit, and credit was shameful and hard to come by. Today, banks, stores, and credit card companies are more than happy to offer you a myriad of ways to have whatever it is you deserve right here, right now, with nothing down and all the time in the world to pay. However, when you stop to think about it, it seems crazy that, in order to show others that we have money, we have to spend it excessively and even crazier that we are reducing our own fortunes in order to help our financial institutions build theirs.

We’ve mastered spending

Accumulating “stuff” is a habit that starts at an early age. We give children “spending money” and encourage them to acquire things. Kids’ meals invariably come with free gifts, and the media stories and commercials they’re exposed to constantly remind children of the many wonderful things they can have in exchange for just a few dollars. As we grow older and start to earn our own money we continue in the habit of exchanging dollars for tangibles (clothes, electronics, fast food, etc.) until we arrive at a point where it almost seems wrong to leave a store empty-handed! As our income grows, so does our consumption and readily available credit makes it far too easy to live beyond our means and accumulate high levels of debt. Having dug myself into that particular hole during my 20s, I can tell you first hand; it’s a recipe for disaster.

It’s not too late to change

Pay yourself first” and “spend less than you earn” is tested and true advice that so many of us choose not to heed and which is not taught to our children in schools. Delayed gratification is a foreign concept; admitting that you’re saving up for something might suggest that you don’t have enough money – far better to put it on a credit card than to lose face. No wonder so many people find themselves committing more dollars to manage their debt each month than they’re committed to savings and no wonder that so many retailers are jumping onto the credit card bandwagon; it’s a booming and extremely profitable business.

So what can we do to make a change? We can assert our ability to make choices about whether our hard-earned money goes to work for us or our favorite retailer. We can understand that spending is a habit that can be controlled and that it’s much more rewarding to buy something with money you’ve saved than with credit. We can recognize that our brain is hard-wired for pleasure and that it gets more pleasure from anticipating the impact of a purchase than from the purchase itself (explaining why so many “must-haves” end up gathering dust in a closet or basement). We can look for ways to get excited about our money and irritated by the way it often works harder for others than it does for us. We can take charge of our financial future and choose to live more simply; selecting and savoring our indulgences rather than overloading ourselves with stuff that we quickly grow tired of. Most importantly we can follow the example of those who actually have money rather than those who just appear to be wealthy. The people who are retiring happiest are the ones who paid themselves first and enjoyed the rest. They built something great for themselves. We can too.


  1. John

    Isn’t it sad that there are so many ways to fall into debt today? Temptation to spend beyond our means is ever present. We should encourage friends, family, and everyone we know to make a commitment to not go into credit card debt… perhaps we need to do the same for mortgage debt?

    • Sarah

      It is sad. Unfortunately debt is big business for financial institutions and retailers so they seem to take every opportunity to extend it to anyone who qualifies, regardless of need. I find it interesting that the rules on mortgages are being tightened in order to “protect us from taking on too much household debt” but nothing is being done to stop companies charging 29.9%APR for their store credit cards!

  2. Paris

    Great reminder! Thanks Sarah.

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