So far, I’ve written about Philosophy, Psychology, Habits, and Happiness. But I’ve neglected a major area of interest of mine: Personal Finance. I’ve been a nerd of frugality for years now, and although some major life changes have happened that have made the journey pretty slow, I’ve collected an extensive amount of knowledge on the topic, and I’d love to write more about it. This is my first attempt on writing something, so I’d be happy to get any type of feedback you might have. Let’s go.

Personal Finance has been around for ages. Benjamin Franklin talked about it in his biography centuries ago. Even the Babylonians had systems for it back in the ol’ BC. Lately, books on the topic have flooded the market. I first discovered Personal Finance by reading a book called I Will Teach You To Be Rich, by Ramit Sethi. A book with many common sense methods for making money work for you.

It was baffling to me that you could build systems around money. Until then I had just spent my monthly salary, and figured that my savings existed of what was left in my account by accident if I hadn’t managed to spend it all (which never happened).

Discovering FIRE

I can’t remember exactly how I stumbled upon Mr. Money Moustache’s blog. Might have been a podcast or another blog, but from the second I clicked onto that website, I was sold. In his blog, MMM talks about the 4 percent rule, which is basically that if you have enough investments to live on the 4 percent value increase each year, you don’t have to work for the rest of your life. In order to acquire this amount of capital an extensive savings rate is usually needed. MMM believes that saving at least 50% of your monthly income is a reasonable goal. Anything less, and there are serious changes you can make in you lifestyle to reach that point. The movement MMM started is called FIRE (Financial Dependence Retire Early), and there are communities all over the world helping each other to change their lifestyles to reach their goals and get out of the hamster wheel.

Your Money Or Your Life by Vicky Robin talks about viewing your money as your life energy. It took life energy to earn it, so why spend it on candy bars? With this mentality saving is easier.

My goal is to do reach FI is max ten years. I’m 29 at the moment, so that means I’ll be able to retire at 39 if all goes according to plan.

I’m in a situation where 50% of my after tax income is my living expenses, so I still have a long way to go. There are other tricks I currently use, though, to maximize my savings every month. I’ll talk about some of them here. But I’d thought I’d start with sharing the 5 most useful lessons I’ve learned since embarking upon this journey.

Making it hard to spend

For me, it’s impossible to control my spending sometimes. It’s like an evil gnome takes over my brain and starts controlling it. I think I’m impervious to ads, but I know I’m not (yesterday google got me again after waving a pair of shoes in my face for the twentieth time). And how many of us haven’t left the grocery store with 6 items we didn’t plan to get?

Instead of putting a leash on myself with pure will, I try to make my environment so that it is very hard for me to spend.


I plan my day so that I have everything I need. I have groceries at home to cook, and I bring lunch to work. If there is no planned activity that day that I NEED money for, I leave all my cards at home. That way it’s close to impossible to spend money on things i really don’t need.

Saved details

Online, having to put in your card details every time you make a purchase is a hassle. This is why I never save my card details anywhere. This makes every purchase just troublesome enough to quench that buying impulse, and many times this saves me, even though I’m not perfect.

Personal Finance is personal

This point is important. In the end, your money will always be yours, and only you can decide what’s important for you. This is the one argument Ramit Sethi keeps repeating and what he (mostly) builds his model on.

The problem is that most people don’t set out time to consider what’s important to them. The spending becomes unconscious, and by chance it is sometimes spent on actual important things, but most times it’s not.

Take time to go through your purchases and decide what makes you happy. Take away everything else (that is not essential for your survival). That will most likely give you room to even increase on the categories you find meaningful.

I used to feel bad for spending money on books. But ever since I decided that reading is an important part of my life, and what I learn can’t be traded for anything, I’ve now stopped feeling bad. It makes me happy (and I actually read them).

Buy Assets, not Liabilities

In the classic book Rich Dad Poor Dad (which you can buy cheaply at Amazon here) Robert Kiyosaki builds his argument around what I also believe is one of the most important aspects of Personal Finance.

There are two things you can own in this world: assets and liabilities.

Liabilities cost you money. An example of a liability is buying a car. They say the second a car rolls out of the dealer’s it loses 20 percent of its value. And on top of that it is costing you to run, insure, and repair over time. Other liabilities include everything dispensable that you can buy that will not give you any real value, and will lead you to buy more unnecessary things in the long run.

Assets make you money. And this is what you should focus on. Assets include stocks, bonds, real estate, currencies, and even tools to grow you business. Arguably a gym membership could make you money in the long run, as it makes you more healthy, which leads to more energy, which leads to better performance. But make a point to try to spend as much money as you can on acquiring assets. This also ties back directly to the 4 % Rule mentioned earlier.

Know what is normal

Although not often the most popular topic of conversation, it could be good to talk to your friend about money. As them how much they spend every month on different categories, to get a good idea what normal spending in one category looks like. You might find out that your view was completely skewed.

I have a friend who goes out to bars often. When I go out with him once a month, that is most likely my only big night out drinking that month. But when he’s not out drinking with me, he’s out drinking with someone else. They in their turn, also might be having their only big night out that week or month. And so it goes on.

I my friends view, his spending is completely normal, he keeps seeing people out with him spending as much money as him on the same category. But what’s hard to see is that his friends don’t spend anything more that month. And he ends up chucking away a big chunk of his money every month without even feeling bad about it, because he thinks it’s normal.

READ: Why I decided to quit drinking (for a while)

This could be applied to all categories by asking around. What is the normal amount people spend on groceries in your country? What is normal rent in your city? It’s good to see where you diverge so that you can course correct.

READ: Why you DON’T have to meditate every day

Get to know life without money

Some people have never experienced what it is like to live without money. What happens if you don’t buy anything for one month? Most likely nothing. As long as you have a roof over your head and food on the table, you’d be fine. And you’d be surprised how little is required to meet those two needs.

By getting to know life without money, you start realizing how much unnecessary money you throw away. And that lesson alone is enough to make you spend less in the long run. Remind yourself often that the majority of things you don’t really need. You can read about Minimalism to get a better idea. I would strongly recommend starting with this book.

One way of testing yourself is to do a 30 day challenge of not buying anything. Make sure you have food for the month, and then leave your wallet in a drawer. Do it with a friend, and it becomes a fun challenge. When you’re done, you can look at your expenses for the previous moth and be baffled how much you spent relative to how little difference there was in how the months felt.

This article was originally posted on

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3 thoughts on “5 Lessons from a Personal Finance Nerd

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