Wednesday, May 16, 2018
Frugality Now, Wealth Later
The world we live in has become a place of choice. We have so much choice that it has become hard to know which choices are best for us. This often leads us to make the wrong choices or regretting the right choices we have made. One of our more important choices to make is whether to live the life we want now or live the life we want later. I always tell my clients that you can choose the retirement you wish to have, or you will have no choice. That requires sacrifice and hard work during the employment years. It also requires frugality. Today I am going to describe 12 things you can get rid of to have wealth later in life. If you really think about that choice, it’s an easy decision.
1) Put off buying decisions for 30 days
I try my hardest to prolong the time it takes to make a buying decision. A super smart man, Brian Tracy, says you should try to wait at least 30 days before making any large purchases. If you wait that long you will often learn to live without the product you desire. After that point getting it will either be extremely necessary or non-existent. Either way, you have weeded out unneeded purchases and focused on important ones. You have also probably taken time to find a better price for the item you need which will save you money as well. There is very little in your life that cannot wait.
2) Recurring bills
Ever notice how everything has a recurring payment option now? Ever wonder why that is so? What is a tougher decision to make: Pay $500 now or $9 weekly for a one-year subscription? If the $500 option was the only one, many people would turn away. $9!!! Well, we all have that lying around. Recurring bills will literally bleed you dry. You must make it a priority to eliminate them as much as possible. 5 bucks here, 10 bucks there all really adds up. I bet if you looked right now you would find over $100 in recurring bills coming out of your accounts on a monthly basis. If you are not saving money every month, that might be one of the reasons.
Start Your Financial Spring Cleaning – Budget Boss
3) It’s not collecting, it’s hoarding
The only thing you should hoard is money and by hoard, I mean save. Having a collection will almost always lead you to waste money on something that will depreciate tremendously in value. Beanie Babies, POG’s, clothing, accessories, furniture all become pretty much worthless after you own them. Do you really need more than one of most things? Probably not. It all adds up to taking more money out of your pocket every month.
4) Avoid the hot spots
I hate the mall. To me, it is a gross place and the day they board them all up I will be a happy man. The reason I hate the mall is that it is designed to make you waste money. Why is there a food court in there? It’s so you can take a food break in between wasting all your money on junk. The massage chair so you can rest and relax in between shopping sprees. The pet store with the cute puppies to make you forget how broke you are. Avoiding the mall will automatically save you money because it is almost impossible to go in there and not spend a dime. Unless you are a senior citizen of course.
5) Throw house parties
The best parties I have ever been to were not at a club or a bar, there were always at someone’s house. You actually can talk with people and enjoy their company instead of yelling over a loud crowd and stepping in puke in the bathroom. Going out is a complete waste of money and I know this to an absolute certainty. You can have an amazing time inviting people over and not have to worry about drinking and driving. It is truly a win-win. We all like a fun night out, but it should not be a regular occurrence. It will cost you a fortune.
6) Careful with clothing
I mentioned the hot spots like the mall. I know I would be happy without spending much money on clothing at all. The obsession with name brand clothing is pretty ridicules. Much can be accomplished by wearing clean, ironed, fresh clothing and by having proper grooming. Women especially need to be vigilant. There is a whole industry designed to make you feel inadequate unless you have on the latest trends. In all reality, you will be perfectly fine being yourself. I don’t speak for all men, but I know I could care less about the name on the tag of the opposite sex’s clothing. It is all made in the same factory and just put in different boxes anyway.
7) Screw the kids
Okay, that was harsh but hear me out. Spending a tonne of money on children is actually hurting them in the long run. Children long for your time, not your money. They don’t even really understand what money is. Spending endless amounts of money on them is just raising them to be vain adults. There are plenty of activities that can be done without spending money or very little. Along the lines of clothing as well. No one cares what kids are wearing. Keep them clean and ship them off. The rest is just excess. Plus, then they won’t have embarrassing pictures of how poorly they were dressed to hide from when they are older. If you grew up in the 80’s, you know. Take that extra money and put it in an investment for them. That will accomplish a lot more.
8) Stop smoking
For the love of god, stop smoking cigarettes. It is so bad for you it is not even funny. Not only that, it has become insanely expensive to smoke. $15 a pack? That’s highway robbery. A pack a day can cost you over 5 thousand dollars a year! I know it is not easy to quit, but you have to try. The health problems alone make it worthwhile but if that doesn’t do it, think of all the money you will have. If you put the money it took to smoke a pack a day in an investment and saved it for 30 years you would have $529,429.09!! ($15 x 30 x 12 x30 x 7% interest). Now isn’t that better than cancer?
10 Overlooked Reasons to Quit Smoking – WebMD
9) Ditch the car, if you can
The price of gasoline is insane. We all see the Facebook posts about how it is criminal to charge people that much for gas. Just a heads up about gas, or anything for that matter, it will never get cheaper. EVER! It will only get more expensive. What can you do? Ditch the car if you can or find something more fuel efficient. If you spend $400 a month on gas, making half the trip would save you $200 right? Why not carpool daily? Imagine you only used your car one week of the month because 4 of you took turns driving the rest to work? There are ways to save money on transportation even if you don’t want to use public transit, which is not bad by the way. That $200 a month could mean an early or prosperous retirement. It is definitely worthwhile.
10) Buy quality
Buying more quality items that will last longer will save you money in the long run. Having to repair cheap items is costly and time-consuming. It also leads to a throw-away society that is terrible for the environment. Reusing quality items and not falling into the disposable trap is a big step to a better world. Also, quality items tend to be more energy efficient, such as your appliances. That will save you money every month as well.
11) Forget the credit card
When you put things on your credit card and don’t pay them off at the end of the month, you are essentially buying them on loan. Ever taken out a loan for a beer? How about a loan for a t-shirt? What about a loan for a cup of coffee? If you maintain a balance on your credit card that is essentially what you are doing. The major problem with this is that the rate of interest is absolutely absurd. If you cannot pay off your balances every month, credit is not for you. Put the cards away and put yourself on a cash diet immediately.
10 Tips for Paying Down Credit Card Debt – Budget Boss
12) Online shopping
Online shopping has increasingly become the evil friend in many people’s lives. It is far too easy to buy something online and see it at your doorstep a few days later. Again, this is all done with your credit card and can really hurt your monthly cash flow. I know many people with an online shopping addiction and it is causing them a great deal of financial strain. Get rid of your online shopping accounts if you cannot stop the urge. Things of convenience often come at a cost. This time the cost could be your future goals.
30 years ago, it was very possible to have all you want during your lifetime and still maintain that standard in retirement. We now live in a society where that is only possible for the wealthy, so the choice must be made to live how we desire now or save it for later in life. It does not mean that you cannot be happy and have a good life in the meantime. What it does mean is that the excess must go because not doing so could lead to poverty later in life.
“Successful people are simply those with successful habits.” – Brian Tracy
Email – joe@budgetboss.ca
Follow Budget Boss on – Facebook LinkedIn Twitter Instagram Pinterest Quora