Frugality Increases Income
If You Spend Less, You Have More
This simple, powerful, and often disregarded rule is something that I have adopted in my life.
It has become my underlying financial thought process as I navigate a world in which nearly everyone has become an unthinking consumerism zombie. They moan not "braaains" but "stuuuff" as they feast upon the trap of advertising.
In a world in which the everyday person is being squeezed between barely increasing wages and ever-increasing costs, we need to be even more vigilant to avoid the never-ending cycle of debt. From the ease of Amazon to car dealers to banksters, there is an endless amount of ways to be separated from your hard-earned money.
Don't despair. There is a safe path to follow.
You only need to step off the treadmill of debt and consumption to get your financial house in order. In effect, giving yourself a raise.
Yes, a raise. By avoiding mindless consumerism and reducing expenses you will have more money than before. To me, that is a raise.
It is not even much of a 'hardship' to do in a world overfilled with material wealth. For some reason, quite a few people think that cutting back a purchasing habit is akin to a standard of living from the mid-1800's.
Far from it.
With people routinely 'upgrading' to a newer thing, a person with a frugal mindset has a near unlimited selection of barely used products to choose from. It is not difficult to make big cuts in your spending that result in small, often unnoticed, changes in your life.
While the changes might feel small, they are often magnified in other areas. Freed of the vast majority of debt and financial troubles, a person that used to worry about the future no longer has to concern themselves with such things as they have much more money than bills.
I am proof of such things.
In just three years I have gone from in debt in multiple areas, to only having a small mortgage. Not only that, I have saved over $100,000 for retirement. Together, I have gone from a net worth of $86,000 to over $250,000 in that same time.
All done while supporting a family on my one income that averaged $64,500 per year over that time.
So don't let the naysayers fool you, it can be done. Quite easily if you jump into the mindset in full force.
You can live well on less than you think, and use that increased income to secure your future.
Great post there. Apart from the lessons learnt, i have also come to understand three effective ways of accomplishing more in life.
#1 Play the Game
We have a tendency to take ourselves too seriously. This often results in becoming too stiff and unyielding when it comes to changing our plans and adapting to new situations. Being flexible and able to see how our circumstances can serve us is critical to our success.
#2 Purge the Distractions
First, it’s important to know the distinction between what’s truly good for you and what you use as a distraction. This can be tricky. For example, spending two hours on Facebook isn’t very productive, unless it’s part of your job. When we’re trying to distract ourselves, it’s usually because we’re supposed to do something challenging.
#3 Write Down Ideas to Make Them Count
Our minds are constantly in a bind, always working, chattering and in that noise, good ideas are born, but they can be easily lost. Nurturing the habit of writing down your ideas and thoughts is by far one of the best things you can do. It allows you to remember your creative outbursts, even when you can’t make use of them right away.
Hey, great tips!
As I grow older, I need to write down my ideas! What I once would remember easily, I now forget just as easily. Haha.
Don’t buy things you don’t need. Live simply and you’ll be more happier
Simple - isn't it?
What you say is true and a popular idea in the FIRE community.
There is a limit to it though because you can only cut expenses to 0%. So if you managed to become a completely self-sufficient person with no expenses at all, you'd be exchanging all that money being spent for time put into production.
On the other hand, increasing revenue has no practical limits. You increased your net work by 164k over those years. Maybe you could have brought in a much higher amount by starting/expanding your own business and increased your net worth faster.
Of course, cutting costs is a guaranteed return while increasing revenue has a lot of risk associated with it. Ideally you want to do both - doing more and more with less and less. That's the purpose of technology after all.
Ah, yes. But remember that a permanent drop in your expenses not only results in you having more to invest every month it also decreases the amount you need every month for the rest of your life.
This means that you don't need to earn as much and can retire earlier, which gives you back more time.
Inspiring stuff @getonthetrain. It's amazing what you have achieved in just 3 years.
We did something similar a number of years ago when, some years into tour relationship we realised we were still spending money as though we were single and carefree rather than as though we were the family that we now were.
The end results was, all out savings were gone and we had £11,000 of credit card debt. That was a third of our combined salaries at the time!
I read an article that said the 3 biggest expenses people "wasted" their money on unnessary DIY, takeaways and processed food.
When we looked at our budget we saw that we were doing exactly that so we stopped. We paid off our debts within two years and have saved more than ten per cent of our income since then.
Sadly we had a big investment loss, due to to banking crisis, so have not been able to retire early, which was our plan.
But, I totally agree with you that
In fact, I would say for most people it is a lot less! 😁
It's pretty crazy how much people must spend on 'extras' as I have tons of money to invest every month and others that make as much or more than me are scraping by. Of course, they always go and grab lunch somewhere while I am microwaving last night's leftovers.
Wise words, wise words. Marketing has done a goob job brainwashing people all over the globe.
That's their job! It's ours to not fall for it.
Saving money now is the only way to eventually leverage those savings to earn even more money in the future, and besides, for safety reasons, it is good to always have good savings in case bad times come.
I think if everyone had that mentality, people would have less financial issues.
Hey, shh! I need those people to buy my shit off eBay to make me rich!
Thank you buddy. You are setting a great example and a true inspiration of what others can accomplish if they make changes like you talk about.
Heck, even cutting out one weekly meal at the restaurant can make a big deal over time considering the nature of Compound Interest.
Thanks again for the Post @getonthetrain
Hey that it does! It only takes about $10 per day to become a millionaire in 4 decades.
Unfortunately I'm not as frugal as I'd wish to be but I know Im way less materialistic than most people I know. Consumerism really is at an all time high but what frustrates me even more with it, is the fact that the wealthiest people will be offered the same goods the poor spend their salaries on for free. Wonder when the masses will wake up and acknowledge the madness :(
Don't count on that to happen. The majority will always rush to be in debt for something shiny.
To listen to the audio version of this article click on the play image.
Brought to you by @tts. If you find it useful please consider upvote this reply.
I enjoy this truthful article. And I agree whole heartedly with you - If you spend less you have more! The consumerism, the capitalism these days is shameful. People are spending money they don't have to buy things they don't need.
People are spending money they don't have to buy things they don't need....
To impress people that don't care.