Eight minutes to financial success: Minute one

The first rule of financial success is that you should ask yourself, 'Do I need this?'

First, an explanation of this brief series.

A few weeks ago, I was having a conversation with an occasional Simple Dollar reader about the challenges he was having with his financial recovery. At one point, he told me – and I’m paraphrasing here a bit – that the biggest challenge he had with personal finance is that he felt like getting himself into the right mindset was an incredibly lengthy challenge, one that required a lot of soul-searching and life evaluation.

To a big extent, I agree with this reader. My own journey from being a personal finance disaster to getting my act together was a rather long one, with fits and starts and lots of soul searching. I read piles of books. I did lots of soul searching. Eventually, I found my own path.

As I look back on it, though, I realize that most of that soul-searching came down to a few key elements. There were a handful of moments that I clearly recall where something “clicked” for me.

Those moments often led to a lot of introspection, but the introspection was much like the aftermath of the key revelation. That new idea would be a big part of my thoughts as I drove to and from work, while I was walking somewhere, and while I was drifting off to sleep. I would slowly digest this idea into my own life.

So, as the comment from the reader sunk into my own thoughts, I thought it might be worthwhile to point out those key thoughts I had that set me on a much better path. Most of these thoughts require just a little bit of observation or a quick action, so I quickly realized that most of these would take only a minute or so for the key thought to catch on – thus, “eight minutes to financial success.”

This series will run most of this week, but won’t disrupt any regularly scheduled posts (reader mailbags, pieces of inspiration, etc.). Let’s get started.

Back during my heavy-spending days, our apartment was jammed full of all kinds of stuff. Two overflowing racks of DVDs. A closet full of clothes. A small mountain of video games jammed into our entertainment center. Several large boxes full of sports cards and trading cards. A kitchen full of so many unnecessary cooking tools that we couldn’t close some of the cabinet doors. Shiny vehicles out in the parking area.

What I found was that the larger the number of my possessions grew, the lower my overall enjoyment of each item went. It took longer to manage them and clean them. I had less time to enjoy the items. Not only that, the rush of positive feelings I had whenever I added something new was smaller than it was before because it had become such a routine.

Not only that, these items were a huge money sink. If I spent, say, $50 on a game and played it for 50 hours, it wouldn’t be too bad of a bargain. If I spent $50 on a game and only played it for six hours, though, then it was a pretty poor bargain. The more things I had, the less time I had for each item I owned, so the cost per hour of enjoyment of everything went up. I didn’t have time to thoroughly enjoy all of the things I had. Plus, I was floundering in financial trouble.

Something had to change.

Ask Yourself “Do I Need This?”
When you’re at home tonight and feeling really comfortable, set aside one minute and try this simple experiment.

Go to the room in your home where you have a lot of possessions that you can see while standing in the middle of the room. Simply look around the room at these items and, with each one, ask yourself if you really need this item.

Is that item really adding significant value to your life? Is that item just one of many that are backed up in a queue that you mean to deal with/watch/enjoy/play with/wear/use/listen to later? Would your life really be worse in any significant way if you had never bought that item? How about if you sold that item right now?

Time and time again, I’ve found that my life on the whole is far better if I get rid of items that fail that simple test and avoid buying items that don’t pass that test. The items you accumulate have a cost – a cost of money, a cost of space, a cost of time, and a cost of effort. If you’re not getting enough value in return for all of those costs, you’re better off jettisoning that item.

Also important is the fact when you start applying this litmus test to everything in your house, you’ll find yourself decluttering at a rapid rate. The items you do have will become easier to manage, you’ll be more prepared to entertain guests, you’ll be able to sell the items for some extra cash, and you won’t have the push to upgrade the size of your living space.

Once you start applying this test routinely in your own life, it will become second nature. You’ll start looking at all of the stuff you’ve accumulated with a more discerning eye, looking for the things that don’t really add joy (and finding that the removal of those items actually does add a bit of joy over the long run). You’ll also use that same eye as you buy things, making stiffer choices about the items you bring into your home and actually finding time to enjoy the things you do have that do bring value into your life.

In the end, your bank account will thank you. You’ll be spending less on non-essentials without losing any real value in your life (and gaining some space and some time freedom). You’ll be improving your financial state by getting rid of those non-essentials, too.

All it takes is a moment to flip that switch.

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