💰 Finances & Money

Details, resources, questions, and challenges

Don't starve yourself

After you have produced an overview of your expenses - and recovered from the shock - try to avoid the urge to slash all costs.

As an example, the FIRE movement (Financial Independence, Retire Early) advocates for a stiff savings rate, allowing you to withdraw early from the job market.

Cool, sure, but don't overdo it. The downside is that you risk living in misery until you're 35 after which you can retire to .. a life of misery.

"I want to save 80% of my income and live off sardines until I'm 60" is not a productive conclusion of your review.

In the same vein, you strictly speaking don't need a budget, but if money flows out quicker than it comes in and you don't for the love of it know why, a budget can be a worthwhile tool to look into.

In short, be reasonable & do your homework before you take action - this Life Area deserves your full attention.

🔗 Related life areas

❓ Questions to consider

  • How much have you saved?
  • Do you have an emergency ("rainy day") fund?
  • What are your current assets and liabilities?
  • Do you know where your money is going?
  • Do you budget, or are you otherwise aware of how you spend your money?
  • What is your effective hourly wage?

👊 Challenges for next year

  • Set up an automated income system for your income & expenses
  • Review ALL your subscriptions: Are you shelling out your hard-earned cash on subscription services you forgot all about?

📚 Resources