Sustainability and financial independence may seem like two very different sizes. One is aimed at reducing your environmental footprint, the other is primarily focused on building a solid financial foundation. Both are great ambitions! And I argue that they are also mutually supportive: the more you pursue one, the more you automatically pursue the other. Not always, of course, but often.
In this post, I will share some ideas for how you can combine living a more sustainable life with achieving more financial independence.
What is sustainability and financial independence?
Sustainability covers both the environmental, social and economic aspects of life. So, living more sustainably means acting in a way that does as little harm as possible to planet and people – you and me included. It also means living within your means. This is probably the most obvious overlap with financial independence, which is the goal of not depending financially on a job (although one might still have a job). Financial independence is essentially based on reduced spending and increased earnings, savings and investments.
How sustainability and financial independence overlap
To me, living sustainably and pursuing financial independence both involve spending my time and money mindfully. Through my financial decisions, I can have a positive or negative impact not only in my own life but also in the world. For example, I can support companies that respect labour rights and make quality products – or not. Or I can buy recycled, reduce waste and save money – or not.
Needless to say, I try to make my impact positive. But when I can’t, I at least try to reduce my negative impact. I do this both because I am privileged enough that I – in my opinion – have a responsibility to do so. But also because I believe sustainable living is a great way to reach financial independence. By spending less and saving more, I reduce my environmental footprint and I reduce my dependence on my 9-5 job.
Examples of where you can save money by being more sustainable
Many of the items that are hard on our wallets are hard on the environment and people producing our goods too. A few of the biggest budget items and items with the heaviest social and environmental footprint are:
Housing: Build a life around sustainability and financial independence
Housing is the biggest budget item for most people. You have the obvious expenses to mortgage payments and taxes. But then you also incur costs associated with heating and maintaining the house. All of these expenses depend to a large degree on the size of the house. The bigger the house, the larger the sales price, generally*. But building bigger also means more pollution and natural resource extraction. Adding to that, it also costs more to heat up a big home, especially if it’s old and poorly made. And the energy needed for heating often comes from non-sustainable sources such as oil, coal and gas. Again: the bigger the home, the more fossil fuels we burn to heat it up. So, living in a smaller, newer home reduces your housing expenses and your environmental footprint.
*Not considering that you can get a house twice the size at half the price in the countryside compared to Copenhagen. This issue, however, is for another article.
Food: Eat for the planet and your finances
Food is often the second-biggest budget item in a household. And it has a huge environmental impact. Water usage and water pollution, land clearing and greenhouse gas emissions, to mention some. We have to eat, of course. But by shifting to a more plant-based diet, we not only save money, as veggies are cheaper than meat – we also reduce our environmental impact. This, by the way, does not mean you have to go 100% vegetarian or vegan – although that helps.
Transportation: Reduce expenses and emissions
Transportation* also makes up a good chunk of a person’s expenses. Car-owners have car payments in addition to fuel, insurance, maintenance and other expenses. And cars emit a lot of CO2 when they are on the road. Now, even in a small country like Denmark, many people do not have the option not to take their car to work, grocery shopping and social activities. However, for those that do have the option, taking public transportation or the bicycle vastly reduces monthly expenses and lowers your contribution to greenhouse gas emissions.
*International travel is not considered here. Although it can be expensive and emits a lot of CO2, car commute is more significant, as almost everyone owns one or more cars.
Clothes: Sustainable consumption is also good for your finances
Although clothes might not make up a significant portion of the average person’s spending, I have decided to add it to the list of examples due to its considerable impact on the planet (and the people producing it). Also, clothes can be an ‘easier’ category to begin with in terms of curbing your spending and living more sustainably. Now, needless to say, new clothes cost money. Moreover, the production of clothes emits tons of CO2, uses a lot of water and often exploits factory workers. Combining this with ever-changing trends or so-called ‘fast fashion’, where we buy and throw out all the time, our clothing habits quickly become expensive both economically, environmentally and socially. So, by only buying new clothes when you really need it, purchasing secondhand and getting better quality, you reduce the impact on your finances, the environment and people in the supply chain.
A final word
There are many, many more examples of where the more sustainable choice is also the better choice for your journey towards financial independence. And of course there are a few areas where the two do not go hand in hand and it is up to you to prioritise one over the other. But I hope this post helped paint a picture of how one often does not exclude the other – and how sustainability and financial independence can be mutually reinforcing.
Do you have any comments or questions? Perhaps you can think of other obvious areas where sustainability and financial independence overlap – or where they don’t? Then please leave a comment below!
- The ERE Challenge Day 1: Finding a Place to Live - October 24, 2020
- Why I Eat Out + Review of MadenItaly: Delicious Vegan Pasta and Pizza - September 30, 2020
- Focus Areas On My Journey to Sustainability and Financial Independence - September 14, 2020