Do you spend money to improve your life, or just to get through the week? Earning more money is hard, but money makes money - the less you spend, the less you’ll need in the future, and the more you’ll have to invest. It’s a snowball. Once you internalise this, tracking your finances, reducing your spending, increasing your wealth, and reducing your workload becomes a fun game.
Once my wife and I realised this is what we wanted to do, it took us 7 years to quit work completely. Frugality is the most important part - not earning, not investing - lifestyle creep is a big part of why.
See:
- your money or your life
- early retirement extreme
- Mr money moustache
Automatically transfer all excess funds into a separate account with penalties for withdrawal.
Our financial advisor gave us these tips:
- Don’t create excessive overhead for managing money. Ideally, you know your monthly expenses, put all the money to cover them in a bill account. That money doesn’t exist and comes out with automatic payments. What remains is “carefree” money that you should enjoy.
- Work towards a new $0. This is for building a safety buffer. You pretend $250 is $0. When you get to $250 in the bank, you start to watch your finances much closer to figure out how to not spend. Then next month, you make the new $0 as $275. By doing this, you get in a better habit of saving.
- Take company matches on 401K & other benefits if you can use them. This should be more money you pretend doesn’t exist because the long term gains are very good compared to the short term outcomes of more money now.
- Have forcing functions built into your calendar for reviewing finances. Once a week, once a month. You shouldn’t stress about money constantly, but you shouldn’t be unaware either.
- As others have said, there’s a big mental & emotional component to doing this work & having the self discipline needed.
- Always pay off the Credit Card balance. Always.
- …No seriously, do not carry CC debt…
I’ve had life style issues 3 times in my life, which I’m really fortunate for honestly. You only get lifestyle creep from growing means & a failure to adjust your situation. It’s significantly harder for many people in our modern world to do some of these steps because people are already paycheck to paycheck. If you get a raise, it’s a blessing (I’m a UU), but you got to use it for good, whether that’s your security or the security of others.
From the article : “people compare their own lifestyle with others”.
Don’t.
I think also the need to project a certain image as mentioned in the article is a big issue for people these days.
It’s an easy trap to fall into, so many people on social media, cosplaying being rich, ability to view life styles of people who are actually rich. There is something nice about having people envy the perceived position you’re at in life.
That said, you shouldn’t really care how you’re perceived. Only assholes feel the need to show others how well they are really doing and thats mostly just to make other people around them feel small, so that they get to feel big.
