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Today’s guest post comes to us from Sarah Barnett. Sarah takes a keen interest in financial issues. She believes that we can all benefit from some simple personal budgeting. She writes for Finance Facts, a personal finance website. You can read more about her methods by visiting her website at the link above!
Is Your Attitude Hurting Your Bottom Line?
Did you know that how successful you are in planning for your retirement has a lot to do with your attitude? That’s right. Being able to retire comfortably in 10, 20, or 30 years depends on what you do beginning right now. And, one of the first things many of us need to do is understand our attitude towards wealth and consumption.
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.
What is wrong with leasing, you ask? Nothing, if you run a business and can use a company car as a tax deduction. However, if you are leasing a car solely because that is the only way you can afford that make of vehicle, which is a very common reason for leasing, you are making a poor financial decision.
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.
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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.
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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.
These are just a few tips you can begin using immediately to start saving money. There are many more out there. You will find that as your attitude towards money and consumption changes, you will be open to many more financial recommendations.
How about you all? What aspects of your attitude help you to save most effectively?
Share your experiences by commenting below!
***Photo courtesy of http://debbiking.files.wordpress.com/2010/07/attitude.jpg?w=300&h=247
