That's where they getcha

In a capitalist society, every transaction is about the markup. The providers of goods and services want to charge as much above their cost as they can to make a profit. The consumers want to bargain that down as much as they can.

We accept a certain amount of markup as the cost of doing business, of living our lives. But we may feel taken advantage of when there are extenuating circumstances. When our emotions get in the way, we are vulnerable to not making rational decisions, and a cool, calm businessman is more than happy to step in.

Here are two times when you may want to step back and not let your emotions get the best of you. Or you may feel that the emotional value in the situations is too much, and you don't mind paying the premium.

Funerals

Funerals are bad business all around, and they are also a fact of life. Grieving, upset families are forced to make decisions they don't want to be making while they try to deal with the loss. It's the ultimate time when emotions can cloud rational judgment.

First, the family probably just plain isn't in the mood to bargain or dicker. Second, there's an intense need to feel like they are doing *something* to make this better, and paying a lot for the funeral can feel like it is that something.

Funeral homes know that, and while they aren't being evil, they are being a business when they charge an arm and a leg. The ordinary markup on a casket is anywhere from 300 to 500 percent of cost. That's supply and demand, but should we really be willing to demand at that cost?

The solution? Plan ahead with your loved ones. Know their wishes and make sure they know yours, so that you can each have peace of mind when the time comes that you are doing right by your loved one. Even better, pay for it in advance. That's usually better than waiting until the last minute.

If you feel that you want an expensive funeral, that's fine. But if you don't, make sure your family knows now.

Babies

I have personal experience with this right now, having a 9.5 week old son sitting next to me as I type this. I simply cannot believe what people will pay for infant products.

Actually, I can believe it. The day after the ultrasound told us we were having a boy, and thus the little baby in there had a name to go with the idea, I was walking through the baby section at Wal-Mart. I was practically overwhelmed with the desire to have everything I saw. For him! How could I let a little money stand in the way of my son having anything? Every toy might be the difference between a properly stimulated brain and a lifetime of dullery! Every safety device might save his life! Cost meant nothing!

I snapped out of it.

Babies need security and attention from human beings more than anything else, and those are free. Not to mention that they grow out of needing most basic equipment so quickly that the secondary market is absolutely flooded.

Don't let cold, calculating businesses prey on your emotions. When you feel the least urge to consider the cost, that's probably when you should be doing it the most.

Time is more precious than money.

It's not (just) about the money ...

We live in a futuristic paradise of plentiful food, amazing technology, cheap housing, advanced education and shorter workweeks than any other century.

And yet so many people are almost never happy. Why? Because they don't really think through what they do with their time. Time is finite, it is precious and it is irrevocable. You can't bank it and spend it later.

A certain amount of time must be spent sleeping, and for most of us working is a must-do, too. By the time you include basic household chores, there isn't much time for anything else. So what should you be doing with the rest of your time?

What you want to do with it.

That's not as easy as it sounds. Imagine if you decided you wanted to cook something and just started grabbing whatever ingredients were in front of you. That'd be a lot easier than following a recipe carefully, but the result wouldn't be nearly as good. The same goes with our time.

What do most of us do when we've run out of things we have to do? We "veg out." Idle website clicking, idle TV watching. There's nothing wrong with TV watching, but it should be reserved for something you really want to see.

Have you ever sat down and thought about what you enjoy doing with your time? Here are three things I enjoy doing that I never did until I finally made a point to just do them:

1) Learning to cook. I started with a simple, delicious homemade bread recipe, and now my arsenal is pretty large, including a wicked made-from-scratch pizza that is cheap and fantastic.

2) Joining a curling league.

3) Blogging

None of those things are as easy as plopping in front of a TV. Cooking means making a commitment to shop for ingredients, and once you've started you are committed to a certain amount of time without turning back. I had to plan my workweek around getting Tuesdays off for curling. But I enjoy those activities a lot more than I do getting worked up over whatever stupid thing the cable "news" channels are trying to convince me of.

Make a log of your time. What do you spend it on each week? What are the optional activities you get the least enjoyment out of, and how much time do you spend on them? What activity would you enjoy more that could replace those least-valuable hours?

Your time is your most valuable asset. Don't waste it.

How low can you go?

How much is it possible to live on? And live comfortably?

I'm not asking anyone to live on a bulk rice and tapwater diet. But I do think we need to understand the difference between a need and a luxury.

How does this life sound for a single person:

Efficiency apartment in Champaign, Illinois. This is a small college town of about 210,000 people (including some adjacent, contiguous towns). By big-city standards that's tiny, but by my standards that's huge (I grew up in tiny farm towns with four-digit populations). Especially because it's a college town, there's plenty to do.

Cost: $250/month

Basic utilities: $100/month (I'm probably going a bit high here)

Landline phone: $50/month

Food: $200/month. (This one always trips people up. Trust me, you can eat *better* cooking at home with cheap, simple ingredients than eating that nasty fast-food garbage. It's cheaper and healthier).

Let's say you already have a bicycle for transportation and a laptop for entertainment (there's plenty of free wi-fi in a college town). You've now got a very decent life going for $600/month. You could be making twice that and saving the difference on minimum wage alone. Add a second person to the equation and a one-bedroom apartment, and you add maybe $400 to the cost and a minimum of $1200 in earnings potential.

That's the basic. Start from there. Add whatever luxuries you can afford until you get to your life. But only add what you can truly afford.

What's the payoff?

I've put a lot of thought into this. Right now, my mandatory expenses budget for my family (me, my wife, my newborn baby) is around $25,000/year. Most people would gasp at the thought of living on a mere $25k (and I fully admit that living in a cheap, rural area helps). But it can be done, and it's not even that tight of a budget.

This also includes $6,500 of minimum payments on a couple of debts that we thoroughly regret.

We've given up some things. We almost never eat out, we no longer have a TV or cable, we don't go on vacations that don't include trips to see (and stay with) family. But we haven't given up anything that we really miss. We live in a very small apartment. We have some extravagances, too, such as a high-speed internet connection and a rather pricey cell-phone plan.

But what do we get in a return for those losses? Peace of mind!

Less than two months after we restarted our lives in the minimalist fashion (not entirely by choice, another story for another time), we joined that select group of Americans that do *not* live paycheck to paycheck. The first time we realized we could go to the grocery store whenever we felt like, not just the day after payday, my wife cried with joy. I almost did a little dance the first time the car broke down and I realized I didn't have to call any family members to beg for money.

We both come from poor backgrounds, which isn't fun, but also helps us keep our goals in perspective. The idea of owning a home, any home, is one of our biggest dreams. I frequently daydream about the day I'll walk into a used car lot and pay cash for a cheap used car when my current one dies. As mentioned above, just being able to buy groceries is a relief.

It's worth it.

Welcome

Welcome to my site on minimalism!

What is minimalism, you say? Minimalism is deciding what's really important to you in life and not wasting your time, money or energy on anything else.

Imagine if you were rebuilding your life from the ground up. No commitments, no habits, no monthly bills. What would you keep? What would you not really need?

Mostly, this is about money. We live in a wasteful country, where we are among the most prosperous in the world yet are constantly deep in debt and high on stress. Why? Because we rarely consider the value of our money. We just keep buying stuff that catches our eye or that other people have, until we run out of money.

Let's change that, shall we?