Surprisingly, many people who have a lot of money end-up in financial trouble. It’s a fact!
One time, a friend of mine came to me for financial advice. He had made a lot of money, he had no debts, no children, no health problems, no mortgages. Everything looked great on paper.
But things weren’t going as planned for him. My life was stressful. His expression was clear. He didn’t have any savings and needed urgent help.
I was unable to do anything but offer some basic advice. Advice that I would be happy to give to anyone, no matter their situation. These tips have saved me so much money and time over the years. These tips may work for you.
Go big when you go to work. You will never regret it. You should strive for the bonus as hard you can. However, in your daily life, act as if it’s not possible.
Never increase your living expenses beyond your income. Never. This rule applies to all situations. You can eat at a fast-food restaurant if you don’t have the money to go out on weekends. You can eat at home if you don’t have the money to go to a fast-food restaurant.
You don’t need to see the movie released the day before. You can wait for the DVD to be released. These small sacrifices can translate into substantial savings. You’ll learn a lot about yourself and your willpower by the time you get the extra pay.
This is something we’ve heard a thousand times. However, a recent CNBC report shows that only 29% of Americans have enough savings to last at least six months. 55 million Americans lack an emergency fund, which is a shocking statistic.
The future is unpredictable. You can’t predict what the future holds. Be prepared for difficult days. This is one thing that’s certain. While some people are better at forecasting disasters than others, most of us don’t see them coming. It is difficult to predict the outcome of a job loss or a family member getting sick.
You will have more problems if your income is not sufficient, if you don’t have enough money and you suddenly find yourself in a financial crisis, than if it was. For example, you will get into debt by using your credit cards. You may choose to take the first job you find, rather than waiting a few months to search for a better one.
It is difficult to change your lifestyle. It is nearly impossible to change your lifestyle once you have become accustomed to certain levels of luxury. Let’s suppose that you are now going to the best places in your city because of your increased income.
It is a steep climb. It’s a steep climb. Here’s my advice: Stay at the lowest level as long as possible, even if you have the means to afford it.
This is true for restaurants, cars and the neighborhoods you choose to live in. It also applies to your mobile phone. For the first time in my entire life, I had zero income when I began working for my current company. It took me two more years to return to my previous salary. However, we did not reduce our living expenses in any reasonable way during those two years. Growing up on a farm, I am disciplined and an expert in credit and money matters. However, it was extremely difficult.
We wouldn’t have wasted our savings if we had climbed the luxury ladder slower when things were going well. Life gets more expensive no matter where you are in the ladder.