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A free spirit’s guide to discretionary spending

May 24, 2011

I recently finished the book “The Art of Non-Conformity” by Chris Guillebeau.  Guillebeau was a volunteer for a medical charity out of West Africa from 2002 to 2006. After returning to the U.S. for graduate school, he realized how much he enjoyed traveling. He then set a goal for himself to visit every country in the world before he turned 35. He has visited 151 of the 192 recognized countries by the United Nations and has just under two years to finish it up.

From looking at his biography, it is easy to see he has lived an unconventional life. I believe we can learn things from everyone, especially those who have a different lifestyle than we do. I learned some interesting ideas about money from Guillebeau in his book.

Guillebeau has four keys that help guide him in spending his discretionary spending. These may seem obvious at first glance, but many times we do not always do what is obvious, so I think the ideas are worth sharing.

First, he happily exchanges money for things he truly values. Second, he tries to not exchange money for things he does not value. Third, he values life experiences more than physical possessions.  Finally, he believes investing in others is at least as important as his own long-term savings.

Guillebeau is at a point now, through his writing and products he offers, that he makes a six-figure income. Even though that is the case, he usually spends about 20 percent of his income on travel. It is something he values and is a life experience he does not want to trade.

He also is willing to splurge on coffee breaks at Starbucks and eat a couple of Chipotle burritos every week. Some financial experts believe these little pleasures are not allowed in a frugal life, but he chooses to spend his money on these things. However, there are trade-offs. For example, he lives in a town with good public transportation so he does not own a car. There also are many other areas where he chooses to buy experiences as opposed to more stuff.

Guillebeau believes there is no such thing as good debt. Many financial professionals will tell you mortgage debt and student loan debt is good debt. He disagrees. By not owing anyone anything he has freedom, which is important to him.

It is easy to see how both of these types of debts can really shackle individuals. When someone in his late teens or early 20s takes out way too much in student loans, it is a debt that will follow him for decades. Likewise, when an individual or couple qualifies for more of a mortgage than what they really can afford, the home that appeared to be a blessing quickly becomes a burden.

Another one of Guillebeau’s principles is if you want to save, focus on increasing income more than cutting expenses. We spend so much time looking for ways we can save a couple of dollars here and there that is beneficial, but the big boost to one’s savings account comes from making more money, he says.

The recession has made this difficult for many, but not impossible. People are getting more creative about how they can increase their income from a side business or by providing more for their employer, they may have earned the opportunity to make more. If you think it is impossible, look at the ones who are making it happen and take your cue from them.

Guillebeau’s third principle is to work toward financial independence, but never retire. It is a common belief that we eventually get to a point where we can quit work and relax. He hopes he gets to the point where he does not have to work, but still gets the chance to make a difference and not have to do it in exchange for money.

I hope I can make this happen in my own life. It seems the people who enjoy and have the healthiest retirement are those who find something beyond themselves to commit. I hope to get my fair share of golf in some day, along with service to the community or an enjoyable part-time job.

Many financial experts would not agree with Guillebeau’s ideals on personal finance. While I am not quite the free spirit he is, I can side with a few of them. It always is interesting to listen to a perspective of someone very different from yourself, and I am glad I read about his take on finances.

If you want to follow Guillebeau’s adventures over the next two years, check him out online at http://chrisguillebeau.com. While he is trying to travel to Central Asia this summer, I hope my family and I can make it to Chicago for a cousin’s wedding. I have been budgeting for several slices of deep dish pizza.

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