Unless you are planning on adding an extension on to your home, the square footage is the square footage. The interior offers a fixed amount of space for which there is only so much room for people, possessions, and furniture.
So it goes with your finances. The quantity is finite. If you do not extend beyond the boundaries of your holdings, you will have a path to financial freedom – or at least the comfort of living within your means.
Business Insider offers a caveat against “spending everything you earn”. While you can go off the rails at any age, it is the fresh college graduate who typically endures years of minimal earnings and pounds of Ramen Noodles who may be most vulnerable to overspending out of the gate.
“Paychecks and bonuses — especially your first ones — are incredibly liberating. What’s more, retirement seems too far off to start considering, making it even easier to overspend in the moment and put your future savings on hold.”
So is the time to learn some stellar savings habits early. Tomorrow tends to arrive sooner than anyone expects so BI suggests it is good practice to:
“Stick to the age-old advice of paying yourself first: Set aside at least 10% for your future as you would any other cost, make sure your present is secure, and then spend whatever is left over.”
Get Rich Quick
You may invent the next Miracle Mop or some other ubiquitous household device, so you can theoretically strike gold. Where does the real challenge exist? Spending the money wisely and saving some for the future. Believe it or not, there’s a reality show that tracks Lotto winners who went from rags to riches and back again…some squandering millions and millions in a few short years.
You may not fall into the extreme money generation part of the spectrum, but it is often harder to hold on to money than it is to earn it.
MoneyManifesto cites one simple rule for getting rich: Know how much you earn. Spend less than that.
“Instead of spending less than they earn, many people are taking out debt to spend more money than they have available today. Debt destroys your financial future.”
Impulse Buying
Some are more vulnerable than others when it comes to spending this way. When standing on a line waiting with a cart of purchases, are you a spender who will approach the cashier with a few more items in your cart than you had initially? In other words, do you shop impulsively?
If you do not fall victim to this type of spontaneous shopping, but still find you are spending beyond your means, perhaps you may consider taking a little more time to make spending decisions in general.
Do You Really Need More “Things”?
It seems we spend the first half of our lives acquiring stuff and then the second half downsizing and simplifying. If your income is truly not enough to support the lifestyle you desire while saving for your future, you have two choices. Either find a job that pays more money, or spend less of the money you are presently earning. At the end of the day, it is that uncomplicated.
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