Benel Lagua l December 8, 2023 l The Manila Times
PEOPLE are amazed that Warren Buffet, one of the world’s greatest investors and richest men, continues to live in a house in Omaha, Nebraska, that he bought for $31,500 in 1958. His tastes are simple, including McDonald’s hamburger and cherry Coke. He avoids the trappings of wealth and expensive toys. He simply enjoys research and analysis that help him invest wisely and consequently grow his wealth.
Most of the time, we fail to realize that we already have the things that we really need. Advertisements and social media are partly to blame for our craving for more. We must undergo serious introspection to realize how unessential spending habits affect the way we live.
Do we really need an item or asset or just want it? Buffet’s advice is to live below our means. If we are happy with what we have, it should be enough.
This mindset has now been embraced by many who advocate downshifting. Simplifying or downgrading one’s lifestyle is a move toward quality rather than quantity. Downshifting or downgrading can take on various forms. Others do so by quitting their high-paying, stressful work for a part-time job with less pay but more time to enjoy life. Some decide to spend less money on unnecessary things, de-clutter their homes, and advocate for eco-living.
A lot of people have had a hard time escaping distractions, experiencing peace, and simply enjoying life naturally. Technology is partly the cause. For all its good stuff, social media has been identified as the culprit, providing stimuli and triggers that lead to mental health issues due to the stiff competition of normal modern life.
This is what downshifting addresses as well. For some others, living on less is not a choice but a circumstance they find themselves in, with the scourge of inflation being felt across the world economy.
So how does one start to downshift?
1. Assess what truly matters to you and accept the need for change. What are the things you want to make time for, and what are the things you are not willing to give up?
2. Face your financial obligations with honesty. If you are jumping from a full-time job to a part-time job, you must start to live debt-free and within your means. If you have a family, it is good to downgrade as a team. If everyone understands the situation, then frugality or downshifting will work out.
3. Start small. What are the expenses creeping up on you? Could it be constant eating out instead of cooking meals at home? Is it buying things on impulse instead of buying what you only need? Create a budget and never fail to include even the small purchases you are making. You might be surprised at how big it adds up over time. Spending habits need to be reformed to have an effective lifestyle downgrade. This includes prioritizing what you should spend on. How about checking out your stuff and de-cluttering those that you do not need through a donation or garage sale? Remember Marie Kondo’s methods for minimalistic life? And when we say de-clutter, it also includes your phone and tech — getting rid of files and apps that you find unhealthy or of little use.
4. Reduce your use of technology. Staying away from the routine of checking social media sites is part of the process. While it is not necessary to shut off social media altogether, one must reduce attachment to stuff or gadgets to get more time for oneself.
Downshifting may even mean an upgrade in the quality of life. Instead of relying on money or gadgets to be entertained, one might be creative enough to engage in activities that will bring lasting memories to family and friends. It is easy to get caught up thinking you need to buy certain things or do certain activities, like traveling, just to be at par with living a “normal” lifestyle. Simplicity helps free up money for things that are more important and essential to living life.
In closing, the bible mentioned that “For the protection of wisdom is as the protection of money: and the advantage of knowledge is that wisdom preserves the life of its owner.”
Downshifting is one of the practical steps many of us can take to avoid excessive anxiety about financial matters. At the end of the day, our way of life is not our accountability to others but our responsibility to ourselves and to the one true source of our being.
*** Benel dela Paz Lagua was previously the EVP and chief development officer at the Development Bank of the Philippines. He is an active Finex member and an advocate of risk-based lending for SMEs. Today, he is the independent director of progressive banks and some NGOs. The views expressed herein are his own and do not necessarily reflect the opinion of his office as well as Finex.