I have this hypothesis that everyone lives their life based on their current level of awareness.
Have you ever seen articles with titles like:
“10 things I wish I knew in my 20’s?”
“10 things I wish I knew in my 30’s?”
Well to write the first article you have to be in your 30’s. To write the second article you have to be in your 40’s. When people get older they acquire more knowledge, more experiences, and more wisdom to draw from. They increase their awareness.
Your awareness dictates how you live your life each day. It dictates how you spend your time, energy, and money. If you are not aware of the power of compound interest, you will have no reason to save. If you aren’t aware of the idea of appreciating assets and depreciating liabilities, you’ll always opt to buy a new car instead of investing in an index fund. Your awareness will dictate how you spend your money.
I like to imagine there exists an awareness ladder with hundreds of different rungs that people live on.
Anyone below you on the ladder seems like an idiot: How do they not know about the power of compound interest?
But anyone above you seems weird: Look at them living on $20,000 per year, what a deprived lifestyle.
The farther away someone is from you on the awareness ladder, the more absurd their lifestyle seems. This means it will be incredibly challenging to convince someone further down the ladder of the benefits of your way of living. Likewise, someone higher up the ladder attempting to convince you of the merits of their lifestyle will seem like an oddball.
Awareness and Happiness
In regards to happiness, I’ve noticed a common trend: the more aware people become of what brings them happiness in life, the more frugal they tend to live.
A great example is Mr. Money Mustache and his family who live on $25,000 per year. To the typical American, this lifestyle seems absolutely absurd. If he has the money to spend, why on earth wouldn’t he spend more? Most people are not on his awareness rung. They haven’t come to the same realizations that he has on how to live a meaningful life.
Another example is the minimalists. These are two guys who preach the message that to live a more meaningful life, we should own less stuff. For most Americans, this idea is ludicrous. But only because they haven’t reached that rung on the awareness ladder yet. They haven’t made the connection that more stuff is not correlated with more happiness.
Or consider people who live in tiny houses like this couple:
From the outside looking in, most people would jump to the conclusion that they’re out of their minds. But they’re simply on a different rung of the awareness ladder. They’re aware of exactly what they need to be happy.
This brings up another trend I’ve noticed: we only consider someone’s way of living “weird” if we haven’t tried it ourselves. Most people who are quick to call the minimalists a bunch of weirdos likely haven’t tried minimalism themselves.
Climbing the Ladder
Often when we make the leap from one rung to the next, it’s because we became aware of a different way of living and were willing to give it a try. We chose to downgrade our house, or start biking to work once a week, or start planting our own garden in order to buy less groceries. All of these little actions seem a bit weird to the people we used to share a rung on the ladder with. They have a hard time comprehending why we would choose to change our way of living…but only because they haven’t tried it themselves.
The more aware we become of what makes us happy, the less we attempt to buy happiness and the more we learn to create happiness.
This is precisely why people higher up on the awareness ladder are able to spend less without forfeiting happiness – they build a lifestyle that doesn’t require excessive spending to be happy.
As I mentioned earlier, people who are older tend to be higher up on the awareness ladder simply because they have had more time to develop their awareness of what makes them happy. But you don’t have to sit around and wait for years to develop more awareness. There’s this thing called the internet and any type of knowledge you could possibly seek can be instantly at your fingertips.
Want to learn how to file your own taxes? Plant your own garden? Build a tiny house? Google it.
Want to know what minimalist living looks like firsthand? Hop on YouTube.
Want to know easy ways to save more money? Or earn more money? Check out the thousands of personal finance blogs online.
Want to know the real science behind happiness? Head to your local library and pick up some psychology books.
We live in a time where we have no excuses for not developing awareness. The only thing that can hold us back is fear – fear of trying new ways of spending our time, energy, and money.
To climb the ladder, you don’t have to go sell your house and start biking everywhere tomorrow. But you do have to be willing to try new ways of living. Try biking to work one day a week. Or try to sell one piece of furniture in your house you rarely use. Or learn how to cook your own food so you don’t have to eat out so often.
Try, try, try. That’s the only way to climb the ladder and test what works for you and what doesn’t.
There are no excuses to stay on the same rung of the awareness ladder forever. Go learn. Go increase your awareness. Go climb the ladder.
I strongly suggest using free financial tools like Personal Capital to track your net worth, spending habits, and cash flow to help keep an eye on your money. The more you track your finances, the better you get at growing your wealth!
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