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Our next subject is Paula Pant of Afford Anything, who learned to be frugal as a child when she emigrated from Nepal to America with her parents. She’s combined a series of revenue streams, from freelance writing to owning rental properties, into an income that gives her the freedom to travel the world. Paula still cuts costs to save money, but while she might be frugal, she says she wouldn’t chase a deal that would save her $3 but occupy an hour of her time. It makes us wonder, how would she feel about Joel walking 10 blocks for pizza?
Describe your relationship with money
I’m fascinated by money. I see money as a true test of what a person actually values. So, it’s easy to say that something’s important to you, it’s easy to give something lip service, but the way a person spends their money is the truest reflection of what they actually value. And so that’s very much the way I look at money, in that I try to be deliberate about how I spend my money in order to make sure that it reflects the priorities that I want and helps me create the type of life that I want.
Where did you develop your spending personality, and did anyone influence it?
I have always been very frugal, ever since I was a little kid. I’m an immigrant, my parents and I emigrated to the U.S. when I was a baby, and we didn’t have any money. We came from Nepal, which is one of the poorest countries in Asia, and we didn’t have any family here or any, you know, we were starting from scratch. So, because of that, my parents were very frugal out of necessity, and I learned a lot of those habits by watching them be very conscientious about how they were spending. So, I’ve actually, as I’ve become older, I’ve had to intentionally teach myself to be less frugal, because I would frequently do things that didn’t respect my own time. I’ve had to really intentionally cultivate a respect for my own time, and not chase a deal that will save me $3 but occupy an hour.
How did you come to this style of living? Was there one instance or a certain circumstance that sparked you to start thinking differently?
There was no big ah-ha moment, I’d say that I started life very frugal, for my family that was out of necessity, and probably the big realization that I’ve made as an adult is that frugality is necessary but not sufficient. Saving is part of the equation, but it’s not the full equation. It doesn’t really help you to save a bunch of money, but let it sit in cash. In order to move the needle, you have to focus on boosting your earnings and investing your savings.
What are your money-managing priorities?
I love the idea of having passive income, which means that I have money that comes in through my investments rather than through my time. And a big priority I’ve set and a goal that I have is to create as much passive income as possible, and that stems from investing. So a big part of why I spend my money the way that I do right now is so that I can invest so that I never have to work for an income. I can choose to work, if I want to, but I won’t have to.
What are some ways you make money that could be seen as unconventional?
Well, I’m self-employed, which by itself is a bit unconventional. I don’t so much have a “job” as I do a whole bunch of different side hustles that taken together create a more-than-full-time income. and so, among my various side-hustles, I earn money as a blogger, as a blog and social media consultant for other companies, as a freelance writer, a rental property owner, and as an Airbnb host. I have seven rental units across 5 different buildings.
Where do you cut costs in order to spend on your passions?
Well, I’m 31 years old and still live with roommates, even though I make a very good income and could easily afford not to. Functionally, the decision of whether or not to live with roommates boils down to, ‘Do I prize leaving my guest room empty, or do I prize an extra $850 a month?’ And given the choice between the two, I’d rather take the extra $850 a month and have that guest room be occupied.
What opportunities that being a saver and being smart about your finances has given you that you might not have had?
I’ve traveled to 32 countries, spending an average of about 3-4 weeks in each of those countries. and several of them I’ve gone back to on multiple occasions. Thailand, for example, I’ve been to 5 or 6 separate occasions. So, there’s no way I would be able to do that if I spent money on all of the things that society said was normal. So I drive an old car, I wear the same clothes over and over and over, I don’t spend a lot of money on those things, which are considered normal to spend money on. But, I can easily just snap my fingers tomorrow and decide that I want to spend the next month in Cambodia or Bali or Aruba, and just go on a whim.
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What advice would you give to someone who needs to start saving money and wants to start spending on things that they really care about?
I would say make one small move immediately. A lot of times, if I tell people to start saving 50% of their income right off the bat, they become overwhelmed by how big of a challenge that is that they end up doing nothing. But the way that you reach a 50% savings rate is 1% at a time. So, start this month by saving 1 additional percent of your income more than you already save. So, if currently you’re saving nothing, then save 1% of your income. Or if you’re currently saving 5% of everything that you make, then next month, boost that to 6%. And every month increase that increment by one additional percentage point.
And you find that’s normally more successful?
Yeah, it’s a little bit like trying to eat healthier. If you’re in the habit of constantly living on frozen pizzas and chocolate chip cookies and pints of Ben & Jerry’s ice cream, and you try to completely change course overnight, yeah, you might have some initial enthusiasm that’ll carry you through the first week, but you’ll quickly slip back into your old habits. But if you gradually make changes, you know, you swap out the coca cola for a cup of coffee and you just do that and make that your one and only change for a month, and then the following month you’ll swap out ice cream for dessert for a fruit medley, and that’s the one and only change you make the next month. And if you just continually, gradually incorporate those new habits into your diet, then after a year, you’ve made these amazing changes. Money is very much the same.
Photo: Lasse Christensen