I was reading just recently about a guy who surveyed multiple millionaires and came up with the finding that most millionaires don’t have a budget. The reason they give is that they understand money and have restraint when it comes to spending. And it might seem that they splurge on extravagant knick-knacks but by comparison they have the wealth to do it. Famous golfer Greg Norman had a boat custom built for $70 million and it would appear to someone on a humble wage to be over-the-top however, his yearly net worth is $300 million. So by comparison would you buy a fishing boat/car/van for $11,666 if your wage was $50,000? The difference between both is 23.33%.
The big question though is what else should you be spending your money on. The quality of our life is dependent on the money coming in versus the money going out. The problem most average people have is they want the feeling of wealth now before they actually have earned it. Marketing agencies know that and use clever tactics to entice you into buying now and paying later and we all have that sense of success when we upgrade our car or our house, right?
Are you logical when it comes to spending? Sadly, most people are not. Christmas is the perfect example of how much we blow out our credit cards each year.
“Australians are spontaneous and wholehearted in our embrace of Christmas – or perhaps we’re just a nation of disorganised spendthrifts.
However you see it, we’re increasingly generous in our gift giving, tipped to spend a collective $11 billion on Christmas presents this year. The average person will spend $593 this festive season, a quarter more than 2012, according to the Commonwealth Bank’s Consumer Spending Survey.” SMH
Try this, if you wanted to buy a “insert item here”, how much would that cost in work time. If you want that new dress or fishing rod, how many hours to do have to work to pay for it. When you look at it that way, it can be some-what inspiring to change your mind and save your money. Before I became savvy with my spending I was planning to upgrade my car to a BMW. I would be working for a long time to pay that one off.
The next time you are faced with an imminent opportunity to buy something, take a step back and ask yourself, “Do I really NEED that or is it that I just WANT it?” It’s difficult to grasp at first, but with practice you will surprise yourself just how easy it becomes. Have a great Christmas everyone.