Problem Solving the Minimalist Way

For the past few months a former colleague of mine (we’ll call her Chelsea) has worked feverishly day and night to research and select a new software package for her employer. The list of must-haves for this software solution extended the length of my arm and getting one that filled the bill was going to cost that same arm and possibly a leg too. During this process, I was invited to “give my opinion” on some of the options being considered. I’m not an IT consultant, though I once played one in another job. No…I’m just a girl who can’t say no to her friends (but trust me, I’m working on it!).

“You know how things work,” Angie said, on one of the many occasions I protested my involvement in this project. “She trusts your judgment and knows that you won’t let her get ripped off.”

Maybe I do have a reputation for finding the most cost-effective solution. Okay, I’ll take that 🙂

Working with Chelsea, I started thinking about how having a minimalist point of view can save you from making costly mistakes. Chelsea is not a minimalist. She’s young and unfortunately part of a generation that thinks the best technology is the newest technology. I don’t think it ever occurred to her to learn to use the software that was already in place before launching into a massive upgrade. Nor do I think she started with the most fundamental of all questions: what problem am I trying to solve? Instead, Chelsea started her search for a software solution by asking everyone in her company for their opinion.

Imagine this scenario – you’re thinking about buying a vehicle. You want something reliable that gets you back and forth from work. You’re going to be the only driver but instead of finding a car that works for you, you decide (why, I don’t know) to ask your neighbors what they want in your car. Jill thinks it should have a GPS, for sure. Bob insists that you need 4WD for the snow. Susy has heated leather seats so she’s convinced you should have them too. And Bill..well, Bill won’t drive anything that isn’t made in America. In trying to find the right car that fits the needs of Jill, Bob, Susy, and Bill you end up with a $549 car payment. If you aren’t already miserable when you drive off the lot, you certainly will be when have to take an extra job to pay for your neighbors’ car.

My point – it’s great to be democratic and inclusive EXCEPT when the solution doesn’t even apply to the people being asked.

Whether you’re choosing a software solution for your employer or a better way to get to work, the key to success lies in simplicity.

  • Know the problem you’re trying to solve and don’t create a problem where one doesn’t exist. It’s easy to buy a solution to almost any problem, real or imagined, and there are way too many folks out there whose job it is to capitalize on your indecisiveness and sell you the next best thing. If you don’t know what you actually need, you’ll be suckered every time.
  • Once you know your real need, ask yourself if something you already have can solve for that need. In Chelsea’s case that might have been just some additional training or another staff member to help with data entry.
  • If you don’t have a solution at hand, make a list of possible alternatives, starting with the simplest. If you need to get to work, do you really need a car? Is there a local bus in your area? Can you carpool or even telecommute?

Solving problems on your own is called being resourceful and resourcefulness is the greatest of all superpowers. Resourcefulness is also the epitome of minimalism. When you learn to trust yourself and solve problems in the most basic manner, you can survive almost anywhere and with next to nothing. But best of all, you’ll be happy doing it, since there’s nothing quite as empowering as independence.

A Look Inside Our Monthly Budget

Last week, a reader asked if we would be willing to share the details of our 2018 budget. Sure, I have no problem with that. We’ve shared our budget several times over the years as we’ve worked toward various goals. With that being said though, every budget is unique to the lifestyle and income of the individual or couple and ours is no exception. As you read this post, please keep in mind that the financial choices we have made, may not be right for you (and vice versa).

A few years ago, I read an article called “The 50/20/30 Rule for Minimalist Budgeting”. At first, I was excited. I thought I’d finally found a definitive guide to help me – a minimalist – create the perfect budget. Believe me, I tried to follow the rules:

  • 50% of your income for essentials
  • 20% to savings
  • 30% to personal

It wasn’t long though before I realized this budget did not fit our lifestyle. Don’t get me wrong, the 50/20/30 rule is a great guideline. I highly recommend starting with these percentages if you are new to budgeting or are having trouble getting your discretionary spending under control. For us though, 30% of our income seemed a rather large chunk to allocate to personal choices, even with our love of travel and fancy dark roast coffee beans included.

Trying the 50/20/30 rule led us to an eye-opening discovery though. We found that we could successfully live off approximately 65% of our (then) income, without compromising our savings or our personal goals. This was all the permission we needed to spend less time working.

Today, we are a single-part-time-income couple (with a cat). After taxes, insurance, and other standard deductions, we will bring home $29,778.72 this year (not including any proceeds from side hustles).  Our current budget is based on this income and follows more of a 72/18/10 rule:

  • 72% of our income is spent on essentials (rent, utilities, insurance, groceries and gas)
  • 18% is directed to savings, investments, and charitable giving
  • 10% is spent on fun (Netflix, baseball games, movie nights, etc. and funding our travel account)

Our monthly budget looks something like this:

Here are a few things to note.

  • Rent is our single biggest expense and that’s not likely to change this year. We’ve accepted that in order to have a safe place to live within a reasonable distance of my mother’s house (we moved here to care for her), we have to pay a higher rent. Believe it or not, this is the mid-range rent for our area. Other apartments start at $1079 and up for a one-bedroom. Who knows what next year will bring though!
  • I have 5 payments left on my last student loan. Woo-hoo!!
  • This budget shows a “zero sum” but sometimes we have a carryover balance between $40 – $160, depending on our actual electric bill and our flexible spending categories (gas, groceries, entertainment, and cash). It is a rare month that we actually spend $80 on entertainment since most of our favorite pastimes are either free or cheap. Any money left at the end of the month is allocated to general savings.
  • Side hustle income is not counted in our budget because we don’t always want to work a side hustle. Sometimes it’s fun, sometimes it’s a hassle. When we are saving for a specific goal, like a vacation, we hustle, but only up to the point in which we reach our goal. Our side hustle income has been about $4,000 so far this year, which is unusual for us, but it has allowed us to cover some unexpected expenses, like vet bills.
  • We use an American Express Bluebird card for groceries and household spending. This is a prepaid debit card that you can pick up at Walmart for $5. There are no annual fees or usage fees. We have $250 debited from our main checking account to the Bluebird account on the 15th of every month. This has been extremely helpful to us in staying within our grocery budget.
  • Our non-IRA investments include $5 per week in micro investing via Stash. Stash allows you to purchase stocks and ETFs (exchange traded funds) in increments of just $5 or more. Since 2016, we’ve earned a little over $110 on our micro investments (plus we’ve learned a lot about investing in general by reading their weekly tips).

For better or worse, this is the budget we created for the year and the one we are trying to stick to. It’s subject to change at any time though, as we’re always challenging ourselves to find new ways to live with even less.