There isn’t a Nobel Prize for personal finance.
But perhaps the Swedes, who created the prizes, need to change that. Because a Swedish lifestyle craze, called “lagom”, is generating considerable buzz in the world of savings and spending.
"Lagom" translates roughly as "just the right amount". And to hear the experts tell it, lagom is the key to how Swedes approach life. The idea behind the philosophy is to avoid chasing excess. It’s comparable to the “moderation is best” idea propounded by ancient Greek poet Hesiod or the “moderation in all things” proverbial saying of the 19th century.
But lagom is a decidedly Scandinavian approach to moderation. And it’s about to have its moment in the limelight. The Swedish ethos is is riding a wave of positive publicity; and new books such as "Lagom: Not Too Little, Not Too Much: The Swedish Art of Living a Balanced, Happy Life," "Lagom: Avoid Waste and Live a More Fulfilling Life by Adopting the Swedish Lifestyle Choice of 'Just Enough'" and "Lagom: The Swedish Art of Balanced Living," are ringing up major sales.
Lagom, like the Danish idea of “hygge” that generated buzz last year, offers a particular approach suitable in almost every avenue of life. And that includes how you manage your money.
Here are three key takeaways from lagom worth applying to your finances.
1. Have a lagom career
Work for 10 to 12 hours a day. Lean in. Multitask. Advance. Put the needs of the firm or the corporation first. Work. Work Work. Those ideas — embraced by much of the American workforce — are the antithesis of lagom.
For the Swedes, an ideal career “means favoring moderation, balance and collectiveness over individualism, hierarchy and overwork,” according to the Financial Times.
Or, perhaps more succinctly, a lagom career is about teamwork and balance, whereas American careers tend to be about individualism and achievement.
Lagom would suggest the most important consideration when considering a job is that it not take much time away from your family.
2. Don't buy too much, because you're going to die
Not everything that comes out of the lagom concept is quite so feel-good in nature as a call to practice teamwork and spend time with your family. (Much like life insurance.)
Consider, if you will, the concept of "Swedish death cleaning".
The old line "you can’t take it with you" is a well-recognized admonition to spend money while you can. The Swedes take quite a different approach. They say you have an obligation to dispose of all the crap you buy before you die. Swedish death cleaning, in other words, is what you do as you grow old and approach death. The Swedes see it as bad form to leave boxes of junk for your heirs to clean up. You bought the stuff, so you have to clean it up.
And so the “lagom” approach to life suggests you not buy more than you need … because you’re the one who will have to get rid of it before you die.
3. Live the IKEA way
If you've ever bought furniture from Sweden's global retail powerhouse IKEA, you're already practicing lagom.
The IKEA sensibility — selling furniture and other home goods that are tasteful and moderately priced — is the epitome of lagom. There’s nothing ostentatious in an IKEA store. Everything is practical and accessible. The entire store is an exercise in 'not too much, not too little'.
So, unsurprisingly, IKEA has become a global advocate for the lagom philosophy.
The retailer has committed to offering workshops and advice aimed at practicing sustainability through what it calls "IKEA Live Lagom".
Participants are urged to look for ways to avoid waste and wasting time. Food preparation is a particular focus — a lagom approach involves cooking "the right amount" of a meal so as to wind up with enough leftovers for additional meals, but never so much that food spoils and must be discarded.
The results have been impressive. It turns out that by living a lagom lifestyle, you’ll can save a considerable amount of cash.
Want more personal finance insights from off your beaten path? You can learn about minimalism and money here.
Image: Leo Patrizi