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Planning for Minimalist Parenting
Frugality vs. Minimalism
As I define it, Frugality is maximizing value per unit cost.
At a basic level, this means looking at the "per oz" cost at the grocery story instead of the overall cost. Or when trying to decide between two choices, doing the mental math on value - 80% of the value for 40% of the cost of the "better" option is a really good deal.
Minimalism on the other hand, is about removing clutter in favor of efficiency (just-in-time, for those who come from a manufacturing background). It might mean buying the more expensive "per oz" cost product in my example above, because the pantry has a spot dedicated to the particular size we need for the week.
Both frugality and minimalism are cornerstones of our family's relationship to money and possessions, but you can see how frugality can often be at odds with minimalism.
J.D. Roth over at Get Rich Slowly has a great article on the subject. I won't spoil the whole article, but the crux of the frugality vs. minimalism argument seems to be about prioritization - which tenant is more important to you for the given specific situation.
I don't have a dogmatic answer about which way the wife and I fall, and we continue to keep both methods in mind when making decisions.
Making Our Own Path
The wife and I have a few specific plans for teaching our daughters about finances, and in each of these, frugality and minimalism have found balance (or at least a balance that works for us).
Foundation 1: Emphasize experiences over things.
This first foundation prioritizes minimalism over frugality, at least in the short term. When faced with the choice of buying a toy for our girls or providing them with an experience, we will probably choose the experience.
The toy may be the frugal decision - it is less costly and would provide tangible enjoyment. In the moment, playing make believe with a new toy might provide close to the same value for a fraction of the cost
The experience is more in line with minimalism. It doesn't take any additional room in our house, and it helps them grow in ways that a toy does not accomplish, such as teaching them about the world. It is likely to cost more in the short-term (lower cost per unit value), but it can leave lasting impressions for years to come.
We can take it one step further. While opting for the experience over just another thing, we can use frugality to guide our decisions.
Disney World might be a experience of a lifetime, but it also costs quite a bit for that experience. Instead we will likely choose other experiences (aquariums, zoos, museums, and state parks, just to name a few) more often than The Happiest Place on Earth.
Foundation 2: Limit toys
The second foundation takes the toy conversation to another level.
It's about frugality - what is the value?
You probably remember a specific toy you received as a child. Maybe it was something you saw on a cartoon or other kid's TV show. I remember getting Transformers and Ninja Turtles action figures when I was very young. I imagined being in those universes fighting forces of evil, and those gifts no doubt influenced my love for sci-fi and fantasy into adulthood.
But the more toys I received, the less I cared about them. There were a few favorites, but the excitement was no longer there on newer toys. The value of each decreased the more I had. Even as a child, I understood the concept of scarcity.
Instead of just adding to the pile, we want to select specific gifts that are meaningful to our girls.
And it's also about minimalism.
In addition to the value discussion, having fewer toys makes it easier to organize and clean rooms. Having more toys can cause undue stress on everyone involved, and we have the power to remove this burden.
I especially liked the conversation the guys at ChooseFi had with Jillian from Montana Money Adventures. She talked about doing her children a disservice by buying them more toys than they can handle, and then requiring them to clean their room. She has several fascinating thoughts on minimalism, and the episode is definitely worth a listen!
Foundation 3: Giving is better than receiving
This is much easier said than done. After all, we typically receive a lot more than we give, at least from a materialistic point of view.
Here's a tactic we plan to use: make holidays a time for giving away one thing that is important to you.
When our girls get big enough to understand the concept, we will encourage them to donate a toy or other item to another child during the holidays. Why not just let them buy another toy with our money? We believe that undermines the importance of the giving.
Giving of ourselves is harder. It requires you to care about the other person more than yourself, and that is a lesson worth teaching. We want to follow suit and give something of ourselves as well.
Be it a donation, giving of our time or money, or letting go of anything else we value, it is most important that we give it willingly and with the right intention - to help someone else in need.
The fact that it supports a minimalist lifestyle is just an added bonus.
Foundation 4: Focus on the most important
Minimalism and the Critical Few
Have you ever heard the 80/20 rule? There's a lot that could be said on the topic (it's one of the fundamental concepts of my day-job), but the idea is that 80% of something is caused by (accounted for, held by, etc.) 20% of something else.
For example, in economics, 80% of wealth is commonly said to be held by 20% of the population. In efficiency, 80% of waste is caused by 20% of defects.
The concept directs us to focus on the 20% or the "critical few" that will have the biggest impact on the whole overall. As we think about activities for our girls, we have do decide what will provide the most benefit.
What 20% of sports, after-school activities, interaction with our family, and free and personal time is "right" in order to make the biggest difference in our lives? We will not know until we get there, but we know we want to focus on strengthening our family unit and emphasizing our personal values.
Foundation 5: Teach personal finance early
Our country is almost illiterate when it comes to personal finance.
Many people go their entire early life without learning the concepts of budgeting, compounding interest, responsible spending, or return on investment. Some parents hold that these concepts should not be introduced to children at a young age, but we disagree.
We recently read a post on Facebook that combats the idea that these concepts are too advanced for children. The mom behind the post says it well:
And while chores may seem trivial in the long-run (I'd argue it isn't), think about this. If your kids are college-bound, we essentially ask them to make one of the largest financial decisions of their lifetime when they have just barely become an adult.
Student loan debt is now nearly $1.5 trillion according to recent evaluations. Taking out loans and paying minimal payments is the the new American way, and it may well keep our kids in debt until their sixties.
Children cannot afford to be financially illiterate. That's why we're starting the education while they are young, offering transparency and direction when those little minds are still sponges.
This is by no means an exhaustive list. There is nuance and subtext behind many of these concepts, and we will continue to develop them as we go along. But having a plan is better than "winging it," even if that plan changes.
Do you have any advice for a new parent on how best to not completely screw up our kids? What concepts did you employ and how successful were they? Let me know in the comments below!