Living below your means isn't about postponing gratification. It's not about giving up products and experiences when you're young so you can have them when you're old. That's not it at all.
What it's really about is freedom.
Most people are, in many ways, slaves. Beginning at age five, we are forced to get up in the morning and go somewhere we didn't really want to go, and do things we didn't really want to do. Elementary school. Then high school. Then college. Then work.
And throughout all those years there was an undertone of fear. Fear that you'll get in trouble with Mom and Dad if your grades suck. Fear that your performance in college won't result in a decent job. Fear that you'll lose your job, and that your family will suffer, if you don't kiss up to the right people, or meet your quotas, or because some asshole above you decides to eliminate your job.... Always that nagging worry and fear in the background.
When it comes right down to it, most of us really don't want to be there. And most of us really don't want to be doing whatever they make us do. Maybe you're even forced to do things you don't feel right about just to survive, like cutting corners, speed over quality, turning a blind eye, not being totally honest....
Dealing with assholes. Dealing with office politics.
Dragging out of bed at 6am. Going to bed at 10pm so you don't feel like crap at 6. Driving through horrendous traffic.
Realizing other people have the power to wreak economic harm on you, and your wife, and your kids (which is a very bad way to be harmed because it involves having decent food, safe shelter, safe transportation, etc.).
Many people live just a few weeks, or months, away from financial ruin or homelessness. Always on the edge. Always needing to rely on others for access to a job, or for a loan, or so you can meet your job expectations.
This isn't living a life that is free. It's living a life in economic bondage. It can be a rather benign type of bondage, but it sure as hell isn't freedom because your choices are limited, your time belongs to someone else, and there's always that undertone of worry and fear.
"What if..."
"How long can we survive..."
"Will I meet my goals...."
So this isn't about postponing fun things until you're older. It's about escaping from the economic bondage of a wage slave. It's about freedom. It's about removing all that fear and worry from your life. It's about removing all the crap from your life. It's about getting out from under those above you who have the power to harm you and your family by eliminating your job, or by tossing you to the curb because maybe they don't like your attitude. It's about realizing that nobody should have the power to harm you like that. It's about wanting to get out from under somebody else's thumb.
You're legally free to walk away from your job tomorrow, but if you don't have the economic freedom to do that, you're not free at all.
It's about being free to sleep as late as you want, stay up as late as you want, and spend your time doing whatever you want. It's about realizing that there is no security unless you make it.
So it's all about freedom, not stuff or things. The sooner you start working toward untying those bonds, the sooner you'll be free. The more you deny yourself now, the sooner you will be free. And you really need to do it when you have the opportunity, because there's no guarantee that you'll even have a job five years from now.
And after you've attained your freedom, there's nothing that will stop you from continuing to work if you're lucky enough to have a job you look forward to going to (or have a job at all). But it will be YOUR choice.
So that's what it's really about. Many people will die at their desks without ever having experienced what it's like to truly be free. We become so conditioned to the worries and fear that we think we are free when we're really not. It isn't until you truly experience this freedom that you realize what you have been missing. The relief and overall sense of peace and happiness is astounding.
Don't let anyone tell you it isn't worth it.
So how do you do it?
What it's really about is freedom.
Most people are, in many ways, slaves. Beginning at age five, we are forced to get up in the morning and go somewhere we didn't really want to go, and do things we didn't really want to do. Elementary school. Then high school. Then college. Then work.
And throughout all those years there was an undertone of fear. Fear that you'll get in trouble with Mom and Dad if your grades suck. Fear that your performance in college won't result in a decent job. Fear that you'll lose your job, and that your family will suffer, if you don't kiss up to the right people, or meet your quotas, or because some asshole above you decides to eliminate your job.... Always that nagging worry and fear in the background.
When it comes right down to it, most of us really don't want to be there. And most of us really don't want to be doing whatever they make us do. Maybe you're even forced to do things you don't feel right about just to survive, like cutting corners, speed over quality, turning a blind eye, not being totally honest....
Dealing with assholes. Dealing with office politics.
Dragging out of bed at 6am. Going to bed at 10pm so you don't feel like crap at 6. Driving through horrendous traffic.
Realizing other people have the power to wreak economic harm on you, and your wife, and your kids (which is a very bad way to be harmed because it involves having decent food, safe shelter, safe transportation, etc.).
Many people live just a few weeks, or months, away from financial ruin or homelessness. Always on the edge. Always needing to rely on others for access to a job, or for a loan, or so you can meet your job expectations.
This isn't living a life that is free. It's living a life in economic bondage. It can be a rather benign type of bondage, but it sure as hell isn't freedom because your choices are limited, your time belongs to someone else, and there's always that undertone of worry and fear.
"What if..."
"How long can we survive..."
"Will I meet my goals...."
So this isn't about postponing fun things until you're older. It's about escaping from the economic bondage of a wage slave. It's about freedom. It's about removing all that fear and worry from your life. It's about removing all the crap from your life. It's about getting out from under those above you who have the power to harm you and your family by eliminating your job, or by tossing you to the curb because maybe they don't like your attitude. It's about realizing that nobody should have the power to harm you like that. It's about wanting to get out from under somebody else's thumb.
You're legally free to walk away from your job tomorrow, but if you don't have the economic freedom to do that, you're not free at all.
It's about being free to sleep as late as you want, stay up as late as you want, and spend your time doing whatever you want. It's about realizing that there is no security unless you make it.
So it's all about freedom, not stuff or things. The sooner you start working toward untying those bonds, the sooner you'll be free. The more you deny yourself now, the sooner you will be free. And you really need to do it when you have the opportunity, because there's no guarantee that you'll even have a job five years from now.
And after you've attained your freedom, there's nothing that will stop you from continuing to work if you're lucky enough to have a job you look forward to going to (or have a job at all). But it will be YOUR choice.
So that's what it's really about. Many people will die at their desks without ever having experienced what it's like to truly be free. We become so conditioned to the worries and fear that we think we are free when we're really not. It isn't until you truly experience this freedom that you realize what you have been missing. The relief and overall sense of peace and happiness is astounding.
Don't let anyone tell you it isn't worth it.
So how do you do it?
The main, main thing is just spending less than you make. That's really just most of it. Do you need cable TV? No? Ditch it. Do you need blazing fast internet? No? Ditch it. Do you need to eat out every sunday? No? Stop it.
You can eat quite comfortably on about $25 per week per person in most parts of the US. You can move into a house that's not as much money to pay off. You can sell your car for a much cheaper one.
There's lots of things you can do to shave your bill if you want. One of the best ways is cutting off all the stuff you have to pay every month. Have a debt that chews away $100/month? Get rid of it. What about a "small" one that's only $15 a month? Get rid of it. That's free money just begging to be saved up.
One thing that I see a lot of people doing, though, is they'll get rid of some debt, or they'll shave money and they'll say "sweet! We now have $50 extra a month! What can I buy with that?"
Wrong appraoch.
The best you can do is to take that $50 extra a month that you had and don't touch it. If you were doing fine without it, you can now save that as free cash to put in a bank somewhere until you need it.
You can eat quite comfortably on about $25 per week per person in most parts of the US. You can move into a house that's not as much money to pay off. You can sell your car for a much cheaper one.
There's lots of things you can do to shave your bill if you want. One of the best ways is cutting off all the stuff you have to pay every month. Have a debt that chews away $100/month? Get rid of it. What about a "small" one that's only $15 a month? Get rid of it. That's free money just begging to be saved up.
One thing that I see a lot of people doing, though, is they'll get rid of some debt, or they'll shave money and they'll say "sweet! We now have $50 extra a month! What can I buy with that?"
Wrong appraoch.
The best you can do is to take that $50 extra a month that you had and don't touch it. If you were doing fine without it, you can now save that as free cash to put in a bank somewhere until you need it.
Find out what you're spending in your life that you don't need to be paying money on, then stop spending money on it. Instead of using that money somewhere else, you use that money to pay off the debt.
Say you have a phone with 1,000 texts a month and you only ever use 500. Well, downgrade to a 500 text limit and then you've just saved yourself $10 a month. Now take that $10 a month and apply it to, say, a debt that you have on a credit card, or something else you can pay off really fast.
You saved only $10 a month, but you're now paying off your smallest debt $10 a month faster. Once you pay off that smallest debt. You can use the money from that debt to pay off your next biggest one. So, we'll pretend you have a debt that eats up $40 a month, and you need to pay $500 to pay it off. You saved $10 a month so you'll be paying off your $500 debt $10 a month faster. So, 10 months faster than normal it's paid off. Then you use that $10 a month, and that $40 a month and now you have $50 a month to use to pay off your next biggest debt. Say this one is $150 a month because your car's engine broke and you're paying off the repairs. Now it's like you're only paying "$100 a month" on it because the other $50 is from the stuff you've paid off.
Maybe you work your way up to $200 a month in "free money". Now, if your car payment is $200 a month you could say "wow I have a free car payment now!" or, you could do the smart thing, and say "wow, now I can pay off the car twice as fast!". Then when the car's paid off? You have $400 a month in "free cash" to start paying off other things faster.
The long story short is, with debt, you want to start a snowball effect. Since you're reading this online, I can assume you can afford internet, a computer, and an hour of free time every day. That means you're probably stable on things, maybe not getting rich, but you're not in danger of getting into huge debt unless something big breaks.
So, what you want to do is get to a place where you're "stable" (that is, you might not be making more money than you spend, but you're not spending more than you make). Then you just save as much money as you can, cut as many corners as you can, and use that saved money to pay off debts while living the same exact lifestyle you were before you started paying off stuff.
Say you have a phone with 1,000 texts a month and you only ever use 500. Well, downgrade to a 500 text limit and then you've just saved yourself $10 a month. Now take that $10 a month and apply it to, say, a debt that you have on a credit card, or something else you can pay off really fast.
You saved only $10 a month, but you're now paying off your smallest debt $10 a month faster. Once you pay off that smallest debt. You can use the money from that debt to pay off your next biggest one. So, we'll pretend you have a debt that eats up $40 a month, and you need to pay $500 to pay it off. You saved $10 a month so you'll be paying off your $500 debt $10 a month faster. So, 10 months faster than normal it's paid off. Then you use that $10 a month, and that $40 a month and now you have $50 a month to use to pay off your next biggest debt. Say this one is $150 a month because your car's engine broke and you're paying off the repairs. Now it's like you're only paying "$100 a month" on it because the other $50 is from the stuff you've paid off.
Maybe you work your way up to $200 a month in "free money". Now, if your car payment is $200 a month you could say "wow I have a free car payment now!" or, you could do the smart thing, and say "wow, now I can pay off the car twice as fast!". Then when the car's paid off? You have $400 a month in "free cash" to start paying off other things faster.
The long story short is, with debt, you want to start a snowball effect. Since you're reading this online, I can assume you can afford internet, a computer, and an hour of free time every day. That means you're probably stable on things, maybe not getting rich, but you're not in danger of getting into huge debt unless something big breaks.
So, what you want to do is get to a place where you're "stable" (that is, you might not be making more money than you spend, but you're not spending more than you make). Then you just save as much money as you can, cut as many corners as you can, and use that saved money to pay off debts while living the same exact lifestyle you were before you started paying off stuff.
Stop spending time in cafes, bars, restaurants, movies, theater, and stuff. Go somewhere where you'll have good memories. Getting coffee at a cafe isn't a memory, it's a money burn. Going to bar isn't a memory, it's a money burn.
Find out what's expensive about what you do right now. Cafe? It's the coffee. Bars? It's the drinks. Restaurants? It's the whole concept of going there. Movies? It's the fact that you're buying a $11 ticket instead of renting a DVD for $1.
Now. If you still want to do these things, that's fine, do them in moderation. Budget out your money and find out what you can "waste" on having fun. Look for a theater you want to go to, a show you want to see, and get some cheap tickets for it. It's still a fun time if you're in the back row, right?
Try hanging out, talking, actually doing things together that you can participate in. Learn how to play ping pong, dare your friends to start working out with you. There are a lot of things you can do without actually spending money.
Anyone who says that you have to stay at home to save money is a liar. Even in a super small town, you can find things to do for a day or two just to kill time. Time that is spent better off by not burning money and actually spending time with others. Look up "quality time with friends" vs just "time with friends". There's a huge difference.
And, as for the spending money without counting? I can see how that would make you feel free, but ask yourself this: are you freer knowing that you may or may not be in debt next month, or are you freer knowing that no matter what you do with your money, you'll end up with more of it next month than you had this month because you budgeted it out?
Partition your budget. Put the bills in one pile, the food in another pile, the emergency crap in a third pile, fourth in the investing pile etc etc. When you're done with the money, put the rest in the bank account and there you go. You can now spend money without counting it because even if you use it all up you've paid everything off that you need to. It's just a matter of re-organizing your priorities with the money.
What you have right now:
"Oh, I'm free, but then, why am I having to sell my second car to buy food?" isn't freedom. "Oh, I budgeted out my money and I decided to go on a trip because I can afford it" is a whole lot more freedom, in my opinion.
Find out what's expensive about what you do right now. Cafe? It's the coffee. Bars? It's the drinks. Restaurants? It's the whole concept of going there. Movies? It's the fact that you're buying a $11 ticket instead of renting a DVD for $1.
Now. If you still want to do these things, that's fine, do them in moderation. Budget out your money and find out what you can "waste" on having fun. Look for a theater you want to go to, a show you want to see, and get some cheap tickets for it. It's still a fun time if you're in the back row, right?
Try hanging out, talking, actually doing things together that you can participate in. Learn how to play ping pong, dare your friends to start working out with you. There are a lot of things you can do without actually spending money.
Anyone who says that you have to stay at home to save money is a liar. Even in a super small town, you can find things to do for a day or two just to kill time. Time that is spent better off by not burning money and actually spending time with others. Look up "quality time with friends" vs just "time with friends". There's a huge difference.
And, as for the spending money without counting? I can see how that would make you feel free, but ask yourself this: are you freer knowing that you may or may not be in debt next month, or are you freer knowing that no matter what you do with your money, you'll end up with more of it next month than you had this month because you budgeted it out?
Partition your budget. Put the bills in one pile, the food in another pile, the emergency crap in a third pile, fourth in the investing pile etc etc. When you're done with the money, put the rest in the bank account and there you go. You can now spend money without counting it because even if you use it all up you've paid everything off that you need to. It's just a matter of re-organizing your priorities with the money.
What you have right now:
- Spend money on stuff I want to
- Pay bills
- Save for future
- Pay Bills
- Save for future
- Spend whenever on whatever
"Oh, I'm free, but then, why am I having to sell my second car to buy food?" isn't freedom. "Oh, I budgeted out my money and I decided to go on a trip because I can afford it" is a whole lot more freedom, in my opinion.
