Slow and Steady

Step yo’ money game up!

You need money to make money

At least that’s what we’ve been told. What if not true? Well, what if it’s not entirely true? While it certainly makes it much easier to make money when you already have money to invest, there is another possible, albeit difficult way to save and invest your way to a better financial situation: living well below your means. I don’t know about you but I’ve never met anyone who spent their way to wealth. Not unless they were buying stocks or real estate.

While I’m not claiming expert status because I’m certainly no millionaire, I’ve managed to exponentially increase my net worth from negative to 6 figures in less than 10 years (in the spirit of disclosure I must clarify that about 1/2 of that is tied up in the equity in my home).

It’s a slow process that requires patience and perseverance. It also requires being with someone who shares your values. You can’t work towards your goals alone while your partner wastes money like no one’s business. Here are my tried and true methods. Some are big some are small but ignoring most or all of them will certainly delay you.

  • Have a payment plan for all debts. Avoiding debt is not always possible. Do so if you can, but if you do have debt, pay it off aggressively. Minimum payments are a trap. They’re meant to keep you in poverty and and fatten the debt holder’s pockets through continuous interest payments.
  • Think before you buy. If you’re an impulse shopper, taking some time before any purchase might put things in perspective and you may realize that you don’t really need it after all. It also helps to think about what better use you could have for the money. How much of an R&R is a European vacation when you know Sallie Mae is coming for you in 10 days? Affordability =/= good decision. Just because you can afford something doesn’t mean you should buy it or that you need it
  • Don’t use warehouse clubs stupidly. If you live alone, what are the chances that you finish that 64-ounce ketchup bottle before it expires. Although, you might be on a strict french fry diet, which I personally don’t recommend, but what do I know? Toilet paper on the other hand doesn’t expire and will always have a purpose. Same goes for detergent, dish soap etc. Not all foods from warehouses are bad. A giant box of cereal? Go for it, those things have a 2-year shelf life anyway, but put down the Crisco unless you’re a baker.
  • Maintain your car. If you already have a piece of junk car, this might not be very useful. But if you already have a reliable car with great engineering and good resale value, this is key. I spend an average of $500 per year on my car. Some years I spend $200 (oil and filter changes) some years I spend $1,000 (brakes, transmission etc.). However, it would cost me about $4,200 a year on a car note. Since it’s well maintained at the dealership, I can have a reliable car that’s paid off and costs me less over time. I don’t fall into the trap of leasing or buying a brand new car every few years. I also have lower insurance costs because as the car gets older, it costs less to ensure. I’ve had my car for 5 years and I hope to keep it for 5 more years. I haven’t even hit 100K miles yet!
  • Shop around. Everyone is out to make money. If you think they’re going to offer you a deal, you’re wrong. Ask and you shall receive. I negotiate my cable package every year. They’d rather take $20 off my bill than lose my business. That $20 is nothing to them and for me, it can be used towards my Christmas fund or an extra student loan payment.
  • . Have a budget. Oh my goodness… you don’t know how many people don’t have budgets or hate making them. Seriously, how do you go through life? If you’re not keeping track of what you’re spending how could you possibly ever have any money? Especially in this world of plastic… This is so important. It also helps you know exactly where you’re spending too much. $35 a week on lattes? Maybe you can use the $200 you saved from the cable bill to get yourself a Keurig. But how can you possibly know that if you don’t know where your money is going?
  • Say no to bank fees. $24 Billion on bank fees? That’s absurd. Get your monthly fees waived by setting up direct deposit or having a minimum balance. Keeping track of your money will prevent overdraft fees and making sure you’re using your bank’s ATM will keep those fees in check as well. At the very least, you should be aiming to make one large withdrawal rather than several little ones if you can’t find an ATM in your network.
  • Review your subscriptions. You never know what you subscribed to years ago that you may have forgotten to cancel. Check your credit card statement and see if there’s anything you’re not familiar with that looks recurring. Auto-renewal on frivolous thing can be a major money suck. Most things are available online anyway. Everything is better free anyway 😉

I have plenty more tips but what will I write about later if I put them all here? Share some of yours and let’s compare notes!

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