The authors of The Millionaire Next Door discovered something not so astonishing about the world’s millionaires: they control money & live within their means. Many like to brush it off with excuses like:
- “If I wanted to, I could!” I’ve heard smokers say the same thing. Many of which can’t.
- “If I couldn’t afford it, I wouldn’t be able to buy it.” At a high enough interest rate, someone will lend money.
- “I make enough money.” Do you save enough money? Income is meaningless when pulled into a vacuum of spending.
In order to learn how to live within your means, the first step is to boot the excuses. The time to be an adult and get rid of them is now. Most don’t know where any of their money goes by the end of month, and everyone complains that they need to make more money. Everyone is worn out, discontent, anxious, and wondering when things will get better financially.
Things will get better once control is regained. The fact is there are people prospering right now, and not because of some magical infomercial they saw late at night, but because they choose to live within their means.
Taking Control of Money
The next step in learning how to live within your means is to take control of money. Right now, the majority of people let money control them. They are on a constant treadmill of work, pay bills, work, pay bills, work, paybills and pay that new bill I just added. This is unsustainable! The goal should be to control money, not the other way around. After all, only one master can be served.
How To Control Money:
- Track it: Track money to see where it goes. It will take a little while to get enough useful data, but trends will show right away. I made a Mint.com video review which is the tool I use.
- Understand it: Look at the reports and figure out how your money is being spent. Surprise is imminent.
- Cut it: Cut unnecessary spending. This may require tough choices, but be strict with your definition of what is necessary.
- Keep faithful: Keep this system going. Doing this for a month or two is a waste of time. It will take a while to see results.
Learn To Say “No”
Often, we are afraid to tell friends that we just can’t do something. We’re worried about what they’ll think. “Will they think I’m too poor?” Stop worrying about what other people think. If your friends abandon you because they think you’re poor, then they were poor friends. Your friends need to be on your side in learning how to live within your means!
Be upfront and let them know that you’re trying to save money. They’ll probably still try to persuade, but remain steadfast. Learning how to say “no” is a strong tool in your pouch for taking control of your spending. It’s not “fun” but it works.
Spend Less Than You Earn
Ultimately, your goal is to spend less than you earn. Once that is achieved, your income will finally be enough. You’ll finally begin building savings and good habits to last for the remainder of your life. The constant nag of “you need to earn more money” will fade. The option to actively earn more money will be available, or you can let your savings do that work.
Who knows, maybe you’ll end up starting a business. You’ll have the confidence to know that you can manage your business properly, and control money going into and out of it.
Make Money a Tool
Money needs to be put back into its rightful place as a tool. Too many live for money, and it destroys lives. If money is anything more than a tool in your life, then reconsider what truly matters. I know it is cliche, but you can’t take money with you when you pass.
On a spiritual level, Jesus said that a person cannot serve two masters, and this is so very true. If you live for money, as the world wants, then not only will you have the problems mentioned in this article, but you also run the risk of serving the wrong master.
Anyone who doesn’t believe that people can be a slave to money and their own greed is sorely mistaken. It only takes a few Google searches to find story after story of people who have lost everything in their pursuits for more money (many of them were already million and billionaires!).