When I was a kid, everyone would complained that they had “no money”. I observed that what killed people was the having the stress of “not having money” and not the actual money itself. So, I developed my own a life philosophy at an early age. I knew was never going to be rich and decided that what I truly wanted was not “money”, but to live stress free.
Most people will make over $2,000,00 in their lifetime. Most people will tell you they have no money. Most people are not realistic and want a Champaign lifestyle on a beer budget. Most people spend money on an endless list of useless things like kids soccer practice, cookies that never get eaten, flowers that never get planted, and fancy out of town vacations. You can not afford it all. You do not get to have it all.
To get ahead, you must train yourself to not purchase things unless you have the cash. Make no mistake, it is not easy. It is a skill that must be learned. The primary rule is “if you don’t have the cash in your pocket, you can’t have it”. It’s that simple.
This is a short list of simple rules about money that I was taught, heard about, or learned through the school of hard knocks. They have served me well.
Grandpa Harry R.’s Rules: “It it not what you make that matters, it is what you save ….”
- Get up and go to work everyday!
- Have multiple sources of income (work two jobs, buy a rental property, etc.).
- Spend less money than what you make (and save the rest).
Mark’s Rules:
- Pay cash for everything you buy. In particular, all small items. Do not use a credit card!
- Do not invest in things you do not understand.
- Pay yourself first. Before paying any bills, put $100+/paycheck into your emergency or long term accounts.
- Have an Emergency Account. Save at least $3000. You will eventually need a new hot water heater or to get your car fixed.
- Have a Long Term Account. Start saving for big long term purchases. You will eventually need a new car, or roof on your house. Save $100/month. Even if you can’t buy it outright, you will borrow less because you now have a significant down payment.
- Borrow less money. For large purchases (i.e. furniture) If you can’t pay cash outright, ask if 6 months same as cash is available.
- Use gift cards when you shop online. Buy a gift card at Kroger’s and get 4x fuel points. Then use the card to shop online. Now, your credit card is not linked to their system.
- Diversify. Make sure your money is not in just one bank. Open accounts at different banks & credit unions and ask your employer if they can divide your check and deposit to both.