How do you save money?
Do you stop buying Starbucks coffee every morning?
Do you stop eating out?
Do you stop buying groceries? HAHA!
We have to look at our lifestyle and evaluate: What do we want in life? What time horizon are we working with?
It seems to me that the best way to become financially free or at least comfortable is to answer these questions honestly. Set goals. Then chart a course to achieve those goals.
No matter how much money you make, if you do not have a plan to keep your money and make it work for you, others have plans to make your money work for them. Think about the ads we see everyday bombarding us with goods the advertisers want us to think we can’t live without them.
If we act on most ads we end up with depreciable consumables that have little value. Our goal is to own assets – things that appreciate in value over time, for example, cash, mutual funds, stocks, and yes, real estate.
The tv ads and the snail mail ads that come to your mailbox, to your email, to your phone even, and your peers, will seem to sell things that you can afford. Yes, you may be able to afford them but when you look at the big picture, your long term goals, are you really making choices that move you toward your goal? Don’t be afraid to say NO if the choice puts you no closer to your goal.
While there are things we must pay for – fixed costs like food, rent, and transportation are the most important. It is imperative to plan for the future with the rest – your disposable income. Remember when you see ads – “only 9.95” is making someone rich; what is it doing for your long term goals? Never say it’s only a dollar always cherish your pennies and the dollars will take care of themselves.
There is nothing wrong with frugality. It’s the way to make our dreams come true. By having control over our financial persona we control our destiny.