Monday, September 14, 2009

Frugal Tip Monday-It's Not What you Make but What You Spend?

Finance is another true love of mine. I came across a great article on regarding Conscious Spending. It definetly hit home with everything that I have been reading about lately. It's not what you make but what you spend is the real key to financial success.

According to Ramit Sethi, unless you establish a financial mindset at a very young age it is hard to break the I-want-it-now habit. He gives a scenario of three friends, their salaries and how they spend.

Friend 1: The Shoe Lover-She spends at least $5000 a year on footwear. Stating that he does not truley believe in the purchase but her six figure salary and various investment makes her authorized for a splurge or two.

Friend 2: The Partier- This friend can roughly spends close to $21,000 a year on entertainment. Mind you that is a bit excessive but again with a healthy salary and a nice standing in his 401K and real estate invesments he is sitting pretty.

And last but not least, Friend 3: The Subscription Nut- He has every subscription from Netflix, local gyms, and online music accounts. He does not disclose his salary but does mention that he does have a budget and plan for his money every month. That means its not more about the spending than it is managing the money.Money should always have a name and a plan. is a great resource for help and direction to a secure financial future. I just ordered the book yesterday, and I hope it lives up to everything that I hope for. I will write a review and let you know if it is worth the read.

Check out another Frugal Tip Monday tips about creating a budget and tools to help manage your finances.

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Blogger CultureCynic said...

and also how you spend it....just becuase you want something doesnt mean you are entitled to it...thats why alot of young ppl are flooding in debt all just so we can act like we are 'up on things' i have seen ppl forgo mortgage to buy a 3,000 shoe, a good way to know if you can afford something is if u can afford it without having to defer actual necessities....need and want are two different things when it comes to Finance,unfortuntly alot of ppl will invaribly learn the hard way...

September 15, 2009 at 4:39 PM  

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