And the greater your savings rate, the sooner you’ll reach that goal of financial independence.
When you spend less than you earn not only do you have money to invest, but by having a lower expense level, you’ll need less income to maintain your lifestyle when you decide to retire.
If you’re spending more than you earn, you need to stop. And if you ever want to stop working, you need to start saving much more than you spend.
The Earning / Spending Trap
The need to work a job you dislike to pay your bills can be stressful. And the more you spend, the greater that stress.
When you spend less than you earn, not only is there a financial benefit, but there’s another hidden benefit as well. In addition to the financial gains, when you spend less than you earn, you begin to realize that you are in control of not just your finances, but you are in control of your life.
I know plenty of people that make large sums of money. And while you would think that someone who makes more in a year than many people earn in a lifetime wouldn’t have financial trouble, that’s not always the case.
Some people just like to spend their money on expensive houses, luxury cars, and extravagant vacations. And what’s even worse is that sometimes it’s not just these big-ticket items that are the problem. What about going out to eat all the time? How about all those impulse purchases from Amazon? They all add up.
There are so many easy ways to spend money. And often the more money you earn, the easier it is to spend that money.
Stop Complaining and Start Doing Something About It
If you can afford these things and choose to spend your money that way, who am I to argue? It’s your money. Spend it however you want.
But if you choose this path, just don’t come complaining to me about the demands of your job.
The real problem isn’t the demands of your job, it’s that you need to put up with all those demands to keep living your expensive lifestyle.
I will admit that I may not be the most frugal of all people out there. I have been known to spend more than I should. In an earlier article, I discussed the difference between cheap and frugal. In my mind, while both terms imply a desire to spend less, frugal implies a lifestyle decision whereas cheap is short-sighted – always paying the least amount possible no matter what the quality.
But if you aren’t in the mindset of deciding whether you’re frugal or cheap because you’re neither, maybe you need to reassess your life.
At the end of the day, we are all responsible to ourselves. Complaining about something won’t get it fixed. Instead, start doing something positive. Stop spending money!
Many people who work demanding jobs tend to feel that their spending is justified.
“I work hard therefore I should be able to take a big expensive vacation.”
It’s only natural. We start wanting a reward for all that hard work. But just like the dieter who decides to celebrate a long run by eating dessert, if we’re not careful, we can let our reward offset the benefit of all the hard work.
Just remember to keep the big picture in mind.
Think of saving money not as a punishment, but as a means to an end. You have a vision of the future and saving money accelerates your getting to that destination.
Stop doing mindless things to derail your efforts.
And if you decide to continue spending money, stop complaining to me about how you hate your job.
Readers, when did you have a that moment of illumination when you realized that you needed to spend less than you earn?