How to save and invest while enjoying life?

2023 was another year where many Canadians have been spending more money on their day-to-day expenses. Groceries, gas, dining out, airfare, accommodation, movie tickets, concert tickets, and just about every expense has gone up in the last year or so. 

To make matters worse, housing costs are on the rise as well due to rising interest rates, limited supply, and other factors. Canadians on variable rate mortgages have seen their monthly payments go up, often significantly. Since mortgages in Canada typically have a five year term, Canadians looking to renew their mortgages soon will have to face a rise in their monthly payments. 

For people who bought a property in Canada during the COVID-19 pandemic lockdown and near the peak of the housing market, it’s becoming increasingly difficult to pay their monthly mortgage payments. A young family in Toronto has seen their monthly payment going up by $1,800 a month due to the multiple interest rate hikes.  

It’s tough reading and hearing these stories. Despite being relatively frugal and really watching what we spend, our 2022 expenses increased compared to previous years.  Like many Canadians, our 2023 annual expenses were higher than previous years, simply due to inflation (we are hoping and aiming to keep our expenses in check but it will be hard). 

Equifax published a study showing that Canadians are facing increasing financial pressure due to the combination of rising interest rates and high inflation. In fact, total consumer debt in Q4 2022 rose to $2.37 trillion, up 6.2% from the same period in 2021. More and more Canadians are relying on credit cards. This has caused Canadians’ credit card debt to increase by more than 15% in Q4 2022. Canadians now owe more than $100 billion in credit card debt for the first time.

All these numbers paint a pretty negative picture of the financial well-being of Canadians. This begs the question, in the rising interest rates and high inflation environment, are there ways to save and invest for the future while enjoying life? 

How to save and invest while enjoying life?

The financial independence retire early (FIRE) movement has had bad vibes in recent times. Many people view FIRE as the extreme way of living … cut expenses, live as cheaply as possible, and retire early.

That’s not realistic. Cutting expenses to the bare bone and depriving yourself just isn’t the way to live. Your quality of life will suffer, you’ll end up hating FIRE in no time, and go back to the “normal” way of living, possibly spending more money to treat yourself as a result. 

When we started our FIRE journey, I was guilty of trying to cut expenses as much as possible. But I quickly realized that depriving myself in order to retire a few years earlier isn’t the best way to live. I want to save and invest while enjoying life too. Here are some ideas we practice on a daily basis you may want to consider incorporating into your own lifestyle.  

Being more mindful and intentional with your money

One of the biggest lessons I’ve learned so far on our financial independence journey is that it is important to spend intentionally. The critical thing is being mindful about what you do spend your money on and what you don’t spend your money on.

Since Mrs. T grew up on a farm and I used to spend a lot of time on farms when I was younger, food is important to us. Therefore, we intentionally spend money on organic produce and eat high quality products. We also aim to purchase locally produced foods and support local farmers. This may mean spending more money on groceries but we’re OK with that.

On the other hand, you certainly won’t find us sipping on wine or beer on a nightly basis. We typically don’t consume alcohol and really only on rare occasions. We drink so rarely that I still have some beers that I bought over a year ago and a few whiskey bottles I bought over ten years ago sitting on the shelves, waiting to be finished. 

We also dislike shopping in general, so we intentionally don’t go to shopping malls unless we absolutely need to. You won’t find us “hanging out” in a shopping mall. We also don’t shop regularly with online retailers like Amazon. Looking at our Amazon order history for the past three years, we purchased fewer than 10 items in total. 

Find ways to cut and reduce your expenses on things that you don’t enjoy spending money on but continue spending money on things that bring you joy. 

One relatively easy way to save money is by reducing the pesky recurring monthly bills. The best method is to call the providers and negotiate better rates. This is something I do on a regular basis – calling up Shaw, our internet provider, and asking for a better deal than whatever’s advertised on their website because we’re considering switching to one of its competitors. We also do this with our cellphone providers too.

Another relatively easy way to mindfully save money and the environment is being mindful of energy consumption – to turn off lights and electronics whenever you leave the room, turn the heat down, and turn off the water tap when you’re not using the water. A few dollars saved here and there can go a long way.   

Generate more income 

Let’s face it, while it’s fine and dandy to be mindful of how you spend your money, you can only cut your expenses by so much without depriving yourself. Therefore, it’s important to look at the other side of the coin – generate more income. 

The best way to generate more income? Ask for a raise.

Many people hate asking for a raise because they don’t deserve one or they think it’s not the right time. Many people just don’t like being rejected. 

I totally understand that fear. However, one of the 40 lessons I’ve learned after 40 years is to ask. If you don’t ask, you won’t get it. The worst thing is that you’ll get a no. I have taken this motto to heart by ignoring all my fear and asking tough questions. In the past, I have asked for raises with my manager a number of times during the annual performance reviews or even midway through the year. I have always backed up this request with performance evidence or if I have taken on more responsibilities. 

Another way to generate more income is through side hustles. Find a way to start a small business of your own. A small business can start off small, like from a hobby of yours, and grow from there. 

If you can generate $100 each month from a side hustle, that’s $1,200 worth of extra income a year that you can use for investing. Despite starting this blog purely as a hobby with the intention to share and chronicle our FI journey, the blog now generates a small amount of income each month. That money is then used for investing stocks in our dividend portfolio and growing our dividend income. 

Summary – How to save and invest while enjoying life?

Money is merely a tool. We need to stop treating it as the ultimate goal in life. Life is about setting priorities and enjoying the present moment. After all, we only have one life and we need to enjoy it now, rather than constantly pushing the enjoyment off to some time in the not-so-distant future…

Therefore, it’s important to save and invest while enjoying life and there are many ways that we can do that.

Don’t forget, saving money and earning more money aren’t mutually exclusive. You can do both at the same time. At some point, it may be worthwhile to earn more rather than save more. When you can earn $50 an hour on a side hustle, spending extra 30 minutes to save $15 on a tank of gas may become counterproductive. On the other hand, earning extra cash for $20 for an hour may not be worthwhile when you can easily save that money by not eating out. 

But since personal finance is personal, you have to make the decision on what’s productive and what’s counterproductive. 

Remember, money is a tool and life is about a series of priorities. Learn to put saving and investing on autopilot so you can enjoy life!