Is Your Attitude Hurting Your Bottom Line?

Do Not Keep Up With The Joneses

Studies have repeatedly shown that, after the obvious income disparity, the biggest difference between the wealthy and the middle class is how they view money. For instance, wealthy households tend to routinely save 20% of their income. They also choose less expensive cars to buy, as well as clothes and everyday items.

The middle class, however, tend towards conspicuous consumption. It is a race to have the newest and biggest SUV, designer labels hanging in the closets, and the biggest pool in the backyard. Driving down a middle class cul-de-sac, you will see manicured lawns and shiny cars. What you do not see is the monstrous credit card debt that many of those households are swimming in, and the fact that many of those vehicles are leased.

Time For A New Way To Look At Things

Look, this is not about getting down on the middle class. Reams can be written about what the middle class contribute to society. The problem is, when you start to think about retiring and being comfortable, the spending habits of the middle class make that difficult to achieve.

Are you ready to change all that? It can take some time to change a deeply ingrained belief, but it can be done. Remind yourself everyday that your self-worth and success is in no way decided by the kind of car you drive, or the zip code you live in. Teach your children this as well. You will be giving them a lasting gift if you do.

If you are looking for some immediate ways to begin saving, experts agree the following tips are financially sound:

• Pay yourself. No matter what the amount, make sure you pay yourself first. Put this money in a savings account. You will find that the more you save, the more motivated you will become. It is human nature.
• Dine in more. Use restaurant dining as a special occasion only. If you add up the amount you have spent the last five times you went out, you will probably feel sick.
• Once a debt is paid off, do not incorporate the money you were paying into your budget. It goes in your savings account, no questions asked.