What Better Personal Finance Can Teach Us About More ...

Alan Cleaver/CC BY 2.0

From the voluntary simplicity of Your Money or Your Life to the cash-free exploits of the Moneyless Man, we already know that rethinking our relationship to money can help us lead a simpler, less destructive lifestyle.

But I've been thinking lately about just how closely the world of personal finance advice?at least the kind of personal finance advice that I find compelling?mirrors the kinds of sustainable living ideas we promote here at TreeHugger.

Here are just a few points where sensible personal finance overlaps with living more lightly on the planet. Feel free to add your own in the comments below.

Track Your Spending/Impact
Anyone who has ever tracked their spending for a month knows that you end up questioning the most routine of purchases. "Am I really spending that much on lattes?" "Is this job worth the hour-long commute and astronomical gas consumption?" Just by being aware of how much stuff you are buying, you can begin to take stock of what really adds value to your life, and what is simply mindless consumerism. As I noted over at Planet Green, you can even go on a "cash diet" to get a handle on your consumption patterns. And on the green side of things, tracking spending isn't the only way to monitor your impact. From keeping a food diary to monitoring your energy use, observation and monitoring is often the first step to identifying priorities for a greener lifestyle. Heck, you could even go as far as residents of this English street who turned their entire neighborhood into a gigantic energy tracking graph.

Deegan Marie/CC BY-ND 2.0

Structural/Embedded Lifestyle Changes Are More Effective than Will Power
One of the things I hear most often from personal finance columnists and advisors is that structural or embedded lifestyle changes are going to have a much greater impact than ad hoc attempts at frugality. While skipping the occasional latte, or not buying that dress that you really, really want may be admirable ways to save money?the chances are that sooner or later you'll give in to temptation and splurge on something else. The problem is you are running up against decision fatigue?so asking yourself to constantly fight your inner urges is a tall order. By contrast, buying a smaller home you can easier afford, choosing to telecommute, or setting up an automatic deposit into your savings account are all ways to embed frugality into your life and avoid the need to rely on will power.

The same could be said from a green perspective. Switching out the lights, avoiding meat, or using reusable shopping bags are all valuable contributions to greener living?but the more you can embed them into your life (carrying totes with you at all times;becoming a vegan or a weekday vegetarian etc), the more sustainable they will be in the long term. This can also be a good argument for technological solutions over lifestyle choices?asking your family to switch out the lights relies on ongoing, concerted effort by many people with (most likely) mixed results. Switching your light bulbs out for more efficient ones, buying green energy or installing solar panels ensures that your household impact will be reduced on a permanent basis no matter how inhabitants behave. (Of course combining technological solutions with behavior change is where the real success lies.)

Buy What You Love, And Love What You Buy
Frugality advocates like JD Roth over at Get Rich Slowly are often unfairly maligned as killjoys or tightwads. But the fact is that frugality is not necessarily about spending nothing or going without. Instead, it's about being mindful of what you spend your money on and making sure that it really brings you pleasure or increases your well-being. This is a lesson that many environmentalists would do well to learn too. While it might be tempting to react against consumerism with extreme forms of self-imposed austerity, it's more productive?I think?to learn to really love your stuff. Buy quality goods that last and make you happy. Repair things when they break down. And if something is just hanging around your house and not being put to good use, pass it on to someone who can give it a loving home.

Fair Companies/Video screen capture

Reducing Your Spending/Environmental Impact Can Only Go So Far
Living within your means is often thought of as simply cutting your spending, but one of the most effective ways to turnaround a household budget is to make more money. The reason is pretty simple. After fixed expenses like mortgages, rent, taxes, etc, there is only so much discretionary spending that most households can cut. On the other hand, in theory at least, our earning potential can be almost limitless.

Now this point isn't directly related to greener living. In fact advocates of Plenitude Economics will argue that earning and working a little less would make our society a better place. But if we substitute "money" for "environmental impact" the lesson holds true. While we may be able to cut our carbon footprint, our water use, or our consumerism considerable, sooner or later we hit a point of diminishing returns. On the other hand, like our earning potential, our potential for positive change is also theoretically limitless. From halting destructive fossil fuel projects to restoring hundreds of square miles of ancient forest, it's in stepping beyond our own personal footprint that we can be real heroes.

You Are Part of Something Bigger
There's no doubt that sensible personal finance can help ensure household resilience and stability. But as the recent financial meltdown shows, even relatively frugal, sensible people can be badly hurt by broader systemic failures beyond their immediate control.

The same goes for environmentalism.

As I argued in my post on why lifestyle changes won't save us, systemic problems require systemic solutions. Sure, turning out the lights and saying no to that cheeseburger can help contribute to cultural shift and reduce pressure on the planet. But we must focus on finding the points of leverage to create truly sustainable, system-wide change. We can't fix Wall Street by just reducing our own credit card debt. And we won't halt climate change by reusing our bathwater. We're in this together, so let's work together.

Source: http://www.treehugger.com/economics/what-better-personal-finance-can-teach-us-about-more-sustainable-living.html

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