Slow Down Fast lists how to become wealthy by living within your means (my favorite piece of financial advice) but I think the piece is better named "six tips for improving your finances." His list includes:
1. Do away with the brand names.
2. Change where you shop.
3. Dine in.
4. Buy used.
5. Stay away from credit cards.
6. Learn to do without.
Here's my take on these:
1. For the most part, I follow this advice, though I do admit I like Nike athletic apparel. I buy it at an outlet store -- does that get me any brownie points? ;-)
2. We shop at thrift stores all the time. In fact, my wife just bought three name-brand pairs of shorts that looks absolutely new for $2.50 each at a thrift store. They would have cost her $30 or so at a department store.
3. A weakness of mine -- I love to eat out -- kept in check by my desire to save money (plus my wife hates to eat out -- not enough healthy choices for her.) On average, we MAY "eat out" once a week if you count getting a pizza at Costco as eating out.
4. See #2 above. That said, we don't buy cars used.
5. Certainly, if you can't control yourself, then don't have a card. I can control myself and I use my cards to earn cash back. Doing so, I earned almost $800 last year.
6. Not that you can't splurge now and then, but if you're life is one big splurge, you're in trouble.
I have trouble with the last item "learn to do without". I think that is contrary to human nature. I would amend that to "learn to do lwithout until you can afford it". Then work on getting the means to be able to afford the things in life that you might want to improve your lifestyle. Am I wrong?
Posted by: "Mo" Money | June 13, 2008 at 12:53 PM
I have to disagree with you Mo Money. It might be contrary to human nature, but I think the desire for things we don't really need passes with time. Learning to do without, in this context, refers to wanting the iPhone when you already have a cellphone, a camera, and a GPS in your car (not that you even _need_ those things to begin with). Actual wealth comes from knowing what can improve your lifestyle (and surprisingly, most of those things are cheap or free) versus those things that give you the illusion of an improved lifestyle. I can do without a good many things if I wait a few days and rethink my desire for them.
Posted by: Ritchell | June 13, 2008 at 02:06 PM
Agree with Ritchell. We routinely "learn to do without" things that are out of reach - multi-million dollar houses, jewelry that cost more than my yearly salary, mansions on Rhode Island, etc. It is perfectly easy to ignore things you cannot afford - just look at them as "museum pieces". You don't normally "desire" to buy queen's jewels. I "desire" an apartment on Central Park West. I think I can learn to live without it. Sometimes we desire to do something we have no talent to - e.g. be a famous singer or dancer. We learn to live without it and not dwell on it. It is the same thing with buying.
One thing you need to do is to appreciate the value of money: how much time it takes you to earn it, what other useful things that you actually need the same amount can buy you. If you value money, you will not be tempted to spend it.
And yes, the desire for many items passes after you have a chance to think about it.
Occasionally, you'll find some other ways. You can learn to cook, and then you might actually prefer your own food to that of the cafeteria or even a restaurant. You may go hiking instead of some-expensive-place, than have a nice dinner at home. You may rent a movie instead of going to the theater, etc.
I think buying used makes sense in some cases depending on the item and individual circumstances. I buy new cars because I don't want to buy somebody else's headache and because I can afford it. For the first few years after grad school, I did buy an item or two in thrift stores. I wouldn't do it now - no time; also there are people who need it more.
The main thing though - learn what you can afford. Ignore stuff you can't. In some cases, you may want to save for something you love. In other cases, just the fact that you need to save to buy something means you cannot afford it: some items just aren't worth months of savings.
Posted by: kitty | June 13, 2008 at 09:44 PM
Learning to do without is a big one for me. It really helps to tap into your inner lazy person. :) Most of the time, it's not really about doing without, it's just about doing without a bunch of excess or unnecessary stuff. But staying away from brand names is a big plus, too. When it comes to clothes, ignoring brands helps you create your own personal style that has more to do with what you like than what's being hawked this season.
Posted by: Sara | June 14, 2008 at 01:19 AM
I agree with everyone else. Learning to do without is probably the most important.
Many of us don't even realize how privilege we are sometimes that we don't realize that some people just HAVE TO do without. We even pleasure ourselves with things that aren't even necessary and complain when we don't get out way. Learn to do without and be thankful for what you do have.
Posted by: Jay | Wealthy Affiliate Insider | June 16, 2008 at 02:11 AM