If you’ve explored our blog, you’ve likely seen that I spent an entire year going through Gail Vaz-Oxlade’s Money Master Class. I posted weekly recaps about the class, which you can find here: Money Master Class – A Year of Financial Guidance. Since our blog is a sustainable lifestyle blog, have you ever wondered: What do finances have to do with living life sustainably?
Why Personal Finances Matter
Finances are intertwined with every area of our life. In our world, money matters. So it makes sense that our own personal money and our personal financial life matters too.
My Financial Story
Up until my mid-20’s I was okay financially. I was not well off, but I made enough to pay my bills and lived within my means. I admit to not paying a lot of attention to my finances, but to knowing that things would balance out in the month at some point.
Then I ended up in a financially abusive relationship which took away my control and trapped me in a large amount of debt. I was eventually able to get out of this relationship, but not before it destroyed my credit and forced me into bankruptcy.
Being in a period of bankruptcy meant that I had to report my finances to a trustee every month. In the reports I had to account for every dollar made and spent. Doing these monthly reports was a great time of reflection, learning, and regaining control of my financial situation. During that time I was able to see the value of budgets and how financial knowledge could enrich my life. It was also during this time that I discovered and fell in love with Gail Vaz-Oxlade and her teachings.
Since that time, I have never looked back. I have become passionate about budgets and personal finances and love to talk about them.
What Budgets and Financial Knowledge Bring to my Life
It doesn’t take long knowing me for someone to find out that I love all things budgets and spending journals and having control over my personal finances. I truly enjoy it all, but understand that not everyone gets joy out of making a budget. Even if you hate bugets, I still think it’s worth having one because it can have a positive impact on your life.
1. Freedom from stress
Money and stress are two things that go hand and hand. Knowing my financial situation, having a budget, and a financial plan have relieved that stress for me. Now, I acknowledge that I am paid close to a liveable wage, so that automatically helps with stress. The reality is, a lot of people are not paid a living wage. The cost of living is so high for some people that, no matter how many budgets are made and how little money is spent, there will still be stress.
For me, not having to wonder how much money is in my bank account, not having to stress whether I overspent on groceries, not having to question whether I’ll be able to pay for emergency dental work or car repairs is a huge stress relief! Paying attention to the details of my finances gives me control over them and empowers me to make decisions. There is no guesswork that can contribute to stress.
2. Ability to plan
I can’t count the number of people that have said to me: “I don’t need a budget. I never spend more than I have.” I was this person before too as I mentioned in my story. There can be a false security when there is a positive balance in the bank and I don’t feel that’s a valid reason to not have a budget.
A budget can help you see how much money you spend on the different areas of your life. Without this knowledge, it can be difficult to plan. For example, how do you plan for your retirement if you do not know how much you need to survive? You are robbing yourself of the knowledge and pre-planning necessary to ensure you are well set up for your retirement.
A budget also allows me to plan for large purchases, vacations, or any other things I want to spend my money on. A budget allows me to create savings goals and to find the areas in my life where I can cut back spending to reach those goals. Simply saying “I’m going to spend less on groceries for the next 6 months” is not a real plan–especially if you have no knowledge of what you are currently spending and no way to track if you are actually spending less.
Have you ever wanted to quit your job and go overseas? Or wished you could take time off to care for a loved one? Or desired to go back to school and change careers?
Knowing my financial situation has given me the freedom to make big life decisions like this. Knowing exactly how much I need to survive on a monthly basis has allowed me to make life choices with ease. Anything from a life change to an item I want to purchase is made easier knowing what my financial situation truly is.
Wait, Weren’t we Talking About Finances and Sustainability?
Yes! Both Krista and I see the two (finances and a sustainable life) as linked. So much so that we talk about it on our What Does Sustainability Mean? page.
Finances and Your Sustainable Living
So what do finances have to do with living life sustainably? As I mentioned above, finances are intertwined with every area of our lives. Ideally we would be trying to make all areas of our lives sustainable, so it is natural that sustainability and finances overlap.
Here are a few things to consider regarding what finances have to do with living your sustainably focused life.
1. Sustainable Choices
Some sustainable choices are going to cost you money; others are going to save you money. Knowing your financial situation and being aware of your budget can allow you to confidently make those choices.
For example, when Krista and her husband were looking into buying solar panels, they had the information necessary to make a sound financial decision. Solar panels are a large purchase that for most people won’t be made on a whim. Knowing your financial situation and being aware of your budget can allow you to make a sustainable purchase such as solar panels with the confidence you are not taking unnecessary risk.
Even smaller sustainable purchases can affect your budget. Knowing whether or not you can afford to buy those reusable produce bags or bamboo toothbrushes is important to your overall financial health. I talk a little bit about how many sustainable swaps are a privilege in my reflections on Plastic Free July.
We all need to do our bit but we need to do it within our means. Knowing our finances enables us to make the right decisions for our own personal situation and gives us the freedom to make sustainable choices.
2. Sustainable Investing
One of the Money Master Class topics that I’m still working to wrap my brain around is investing. Gail Vaz-Oxlade says that, before you invest, you should be able to explain your investment choices to a child. If you can’t do that, then you shouldn’t be investing.
Based on this, I have a ways to go! BUT that doesn’t stop me from learning and becoming more aware of my finances. The awareness and control I have over my financial situation allows me to make those financial choices of where I invest, who I invest with, and what I’m investing in.
There are a wide number of banks out there and they each have varying degrees of commitment to sustainability.
I won’t name and shame specific banks in this post, but some things to look out for are:
- What are the banks values?
- Do they back up what they say with action or are they greenwashing?
- What are their investment portfolios?
- Do they have a sustainable investment option?
- Do they profit from big oil companies?
- Does the bank’s values line up with your values?
3. Less Waste
Creating less waste is tied to the idea of making sustainable choices. I find that when I am more reflective of my finances and where my money is going, I create less excess waste. This less waste can be tied to my being able to purchase sustainable products. It can also be tied to my simply buying less.
One of the first lessons in Gail’s Money Master Class was to reflect on our core values. Money and how we use it is tied to so many parts of our lives including values and feelings. We have seen this in the pandemic where online shopping became an addiction for many people because spending money on new things was tied to positive feelings.
Being aware of my finances and my core values has allowed me to make conscious purchases and the ability to refrain from purchasing items I don’t need.
What Finances Have to do with Living Life Sustainably
Finances are intertwined in many areas of our lives. For me, it means that my sustainable choices are impacted by my financial knowledge and my financial situation.
What does it mean to you when you hear the question: what do finances have to do with living life sustainably? Do your finances impact your sustainable lifestyle?
I’d love to hear your thoughts in the comments!