COSTCUTTING
 
 

LEARNING TO LIVE BENEATH YOUR MEANS
 

Living beneath your means is the only route to take to enjoy a secure and comfortable standard of living throughout your working and retirement years. Living beneath your means isn’t a suggestion. It’s an imperative. Spend less than you earn! Of course, most of us have heard this before — from our parents. But who listened? Not too many people. All you have to do is look at where your spending habits have landed you. If you’re like most people, you’ve simply ended up repeating your parents’ financial mistakes rather than heeding their experience-based advice.

Cutting back on expenses, increasing your savings, adding to your investments — these are things many of us are not accustomed to doing. We’re too accustomed to getting what we want, when we want it, to concern ourselves with such fundamentals as actually owning what we’ve got. The problem is that without steadily increasing your savings and investments, you’re literally living on borrowed time. If you don’t own the home you live in, the car you drive, the furniture you sit on, or even the shirt on your back (let alone the washer and dryer you use to clean it), is it any wonder that, when a minor financial problem hits, it packs a heavyweight punch that can knock your finances for a loop?  No, it isn’t.

The fact is that America as a culture — a culture of conspicuous consumption — isn’t the land of the free. It’s the land of the indebted. It’s time to stop shackling yourself with ridiculous spending habits, develop sound saving habits, and learn to invest regularly and wisely so that you can share in a piece of the American dream rather than the debtor’s nightmares.

Frugality Is In

Is plastic out? Well, let’s just say that the devil-may-care attitude about charging has (thankfully) lost a lot of its wattage. In fact, those who are still living on credit cards are now looked at for what they are — dim bulbs!
 

Spend Less and Enjoy Life More!

 
v   You’ll no longer have to worry about living from paycheck to paycheck, wondering and worrying about how
you’re going to be able to meet next month’s bills.

v   You’ll no longer have to worry about losing the shirt off your back if you are laid off from work or suffer a pay cut.

v   You’ll no longer feel compelled to keep up with the Joneses. (You’ll be miles ahead of them when you retire.)

v   You’ll no longer have to worry if you’ll be able to afford your children’s tuition, your own retirement, or even your own funeral.
 
 

HOW TO LIVE BENEATH YOUR MEANS

To succeed, you have to continually look for ways, both small and large, to cut your expenses. You may think that you have no fat to trim and can’t possibly make your budget any leaner. You are wrong. Innumerable ways exist for you to pare small amounts off both your recurring and your annual expenses. While some of the savings may individually seem marginal, in total they will be significant. Unfortunately, people who don’t get into the habit of living beneath their means — saving regularly — will never achieve financial security.

Remember, saving doesn’t mean having to live like a miser. As your savings rise and your net worth increases, even savers can indulge in luxuries. But the ultimate goal is financial security — being able to maintain the same standard of living throughout your retirement as you did during your working years! It is in your grasp.

Putting Your Savings to Work

Investing is the focal point of the whole personal financial-planning process. Most of us have only a vague notion about the stock market’s relationship to other people’s money. Despite the stories you read about Wall Street — junk bond czars landing in jail, small investors landing in the poorhouse or on Easy Street — the world of finance has much to offer the average American. Yet most of America is missing the boat when it comes to investment. Prudent investment will enable you to take the money you’ve worked so hard to save and put it to work for you.

Be Self-Sufficient

When it comes to taking control of our financial lives, many of us have lost the pioneering spirit. But you cannot rely on others to provide sufficient resources to achieve financial security for you. You must do most of it on your own. Here’s the secret to financial success revealed:

v The only way to get money to invest is to save regularly.

v The only way to save regularly is to spend less than you earn.

v The only way to spend less than you earn is to live beneath your means.

v If you don’t get into the habit of living beneath your means, you’ll never save enough money to invest, and so you’ll never achieve financial security.
 

Develop a Cost-Cutting Plan

Cutting expenses is never as difficult as one thinks. Like dieting, it’s the thought of having to cut back that keeps us hungering for more — even when we aren’t hungry.
 

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