Focus on the big wins?
This writer suggests you ignore the small stuff and focus instead on big wins to improve your finances. He talks about finding ways to achieve more income, getting a better job and creating wealth. The testimonials on his blog are from people who now earn a lot more than they used to so can still buy their morning cappuccinos.
I can see that creating extra income could mean the end of many people’s money woes. However, I also know that a more systematic and disciplined approach to finance is also essential for a lot of us who are rubbish at money management, whatever our income.
A question of attitude
I have listened to enough of the Dave Ramsey Show on You Tube to understand that there are folk out there earning large incomes who still spend more than they earn.
There comes a point when you have to look at your attitudes and spending habits in order to improve your finances. The person who earns £150k a year but spends £160k is no better off than the person who earns £25k but spends £30k. It could be that the high earner may be able to keep their daily latte but cancel their skiing holiday in order to get back on track. Whatever they do, they still have to make some sacrifices and learn to say no. It’s all relative.
Small but significant choices
Either way, in my view small daily choices towards frugality can help anyone. The more firmly you tighten the belt the quicker you can pay off debt, build an emergency fund, pay off your mortgage or begin to put your cash into investments. I can’t see why you can’t go for the big wins and work with the small ones. Surely that will get you to where you want to be faster?
For example, keeping a spending diary can be useful to see where your money is disappearing. Making a budget each week or each month will help you establish how much you can use to pay or debt or how much you could afford to put into savings. Meal planning and searching out bargains in the supermarket can be vital for those on low incomes but is likely to just be sound common sense for a few millionaires too! And, yes, cutting out that morning take out coffee could be worthwhile as well.
Perhaps some of them started on their road to wealth by saving the money they used to spend on coffee and investing it instead!
Prudence and frugality
I like to think that many of those with plenty of money got there through prudent and sensible money management rather than simply earning big bucks. After all, there are plenty of stories of celebrity bankruptcies. They had it all but made terrible financial decisions and ended up with nothing to show for all their hard work.
I may not ever be wealthy but at least by making daily choices towards frugality I will have peace of mind and control of my money. Check out my top 20 frugal habits here.