| Real Life Strategies for Building Wealth

save you thousands

Do you want to know what will save you thousands of pound (dollars) over the next year?

Ah, you may be thinking, here is this old trick. She crests our interest and immediately hits us with the same old cr*p.

You know the kind I mean. All this stuff about the overly familiar ways to save you thousands of pounds that includes ‘buy supermarket own brands’, eat baked beans for the rest of the year and don’t take a shower for the next month.

Let me ask you, friend; when have I done anything like this to you? When was the last time when I offered you banality for dinner?

No, dear; tonight, if not the right time to mention beans or to convince you to lower your hygiene standards. True to my promise to you (to educate, inform and entertain while helping you build sustainable wealth) and to the focus of The Money Principle I’ll tell you what I believe to be the five habits to help save you thousands, instead.

But, Maria, why is it important for me to change my habits? All I want to do is make my money lasts till the end of January (hard one, I know) and, possibly, to save a bit of dosh.

Ah, my dear, now this is a good question. Habits are important, you see. Your habits are what is behind all the technicalities of ‘spend less than you earn’. You develop good, healthy money habits and you can put your feet up and watch your wealth grow.

You continue with your bad habits and…well, here you can fill in the blank with your worst money nightmare.

#1. Indulging in some luxury will save you thousands

Okay, may be not thousands but many hundreds of pounds (dollars). Three is no denying that we all need, and crave, comfort and security. According to a great book I’ve been reading, this strive for comfort and security is embedded in the fairly primitive part of our brains; the part controlled by emotion that he calls the Chimp.

(The book is The Chimp Paradox by Steve Peters and I think that you should read it.)

You can’t let your Chimp run free because this will make you a mega jerk who is intolerable even to yourself. It is the job of your ‘human’, or the rational part of your brain, to manage the Chimp.

One of the most effective ways to manage your Chimp is by bribery, by giving it a bit so that it stops lusting after too much.

This is why, working out your key ‘wants’, and allowing yourself to have these, will in the long run save you a wagon-load of money.

#2. Learn to put your money where your mouth is

Do you know what you want in life? What you really, really want?

No?

Now this is a problem when you try to build your wealth. You see, all throughout your life you can have anything but you can’t have everything.

Work out what makes your life worth living and spend your money on the things, events and activities sustaining it. And you know what? It matters little whether what gives meaning to your life is trainspotting, travelling the world or generosity. Just figure it out and make a habit of spending your money on it.

#3. Buy things only when you need them

When you get the chance, do watch the ways in which the ‘well to do’ and ‘poor’ people shop. Soon you’d notice that the ‘well to do’ buy things when they need them and poor people buy things because they can do.

Develop the habit of buying things when you need them even if you don’t have much money. And as a reader of The Money Principle, you already know better than to think that this has anything to do with the ‘look after your needs’ school of thought; I’ve always believed that we should focus on our want to manage our money properly.

This habit will save you thousands by training yourself not to lust after things while taking maximum pleasure when you get them. You’d also have less clutter in your house as a bonus.

Oh, and I almost forgot. Don’t bookmark sites that offer you deals all the time and ignore shop sales. These are marketing ploy to keep you a consumer.

#4. Always look at the wider picture

Do you know the key difference between extreme frugality that squeezes the living hell out of you and becoming a fugal artist?

Okay I’ll remind you then. Extreme frugality looks at the world, and the things in it, as unconnected. In other words, when trying to save you thousands you’d be looking at lowering the cost of your life with little regard to the quality of life you may lose. Like eating baked beans all the time, staying in the cold and cutting your own hair.

When you are a frugal artist, on the other hand, you see the world as connected. This is very different way of thinking that shift attention from the very narrow and specific (my hair) to the wider picture (what would I lose or gain by having a professional haircut).

Shifting your perspective from the specific to the wider picture is the best way to save you thousands without, or with very little, loss of quality of life.

#5. Automate your savings/investments

It doesn’t matter how much you save if there is nothing to show for it at the end.

Call me naïve but it seems to me that we save wither for the future or because our life is larger than our earnings. In both cases, things will get better financially only if you find a way to build up your savings and investments.

Make saving a habit by automating it. Get up and set up a direct debit payment to your savings account.

You don’t have a savings account?

Open one and do it now. Start putting money away; it may be only £20 per month – do it. You’d be surprised how fast it builds up and how much security it will give you.

Finally…

I find January a long month for my money and suspect that you do as well. Between you and me, February, March April…and so on, can be longer than your pay as well. Restore the balance by practicing the five habits to save you thousands I shared above.

By developing these habits my months match my pay and I love my investments grow.

Do you have, or know of, any other habits that will save you thousands? Don’t be shy and share.

photo credit: Dey Louis Roederer champagne via photopin (license)