With Christmas out the way and most of us feeling substantially poorer than before the festive season began, many people's minds will be switching from spending mode to saving mode. If your goals are longer term aimed at achieving financial freedom, it's important to realise that this can often be an art rather than an exact science.
There are countless sources of information out there to help you both save money and spend money more efficiently, but staying true to your saving objectives is what will makes all the difference between obtaining wealth or living in debt. There are a number of basic principles that you can apply to your daily routines as far as spending is concerned that will put you on the path to financial freedom. What you'll find below are some of the most important tactics that the average person ends up overlooking, which are the A’s, B’s and C’s of saving and should never be forgotten.
Gambling your way to Wealth
It’s very interesting to read into the lottery system and how that entire business model generates such large profits. Do a little research into the subject and you will generally find that lower-income areas are more inclined to spend larger amounts on tickets. These are towns and areas that generally struggle more compared to most every month, yet lottery ticket sales within these areas skyrocket compared to wealthier regions.
A world-class example of unfair odds is in the city of Las Vegas, where countless people every year feed their hard earned cash into slot machines in casinos the in hope of winning large sums while knowing full well that they're all rigged against them. If the above example didn’t make it clear enough, let me re-emphasise, never gamble if your goal is to get richer, the odds are always stacked against you from day one.
A Bonus = Freedom not a Jet-ski
I’ve always believed that hard work results in good luck and if you’re a follower of ‘The Secret’ it falls under the same sort of principles. Examples can be a bonus from work, inheritance from a distant relative or simply a great one-time opportunity to make extra money. However, when you receive that money don’t succumb to the initial urge of buying a new car, motorbike, shoes, designer clothing or whatever your preference is.
Why would you inflate your lifestyle costs when you still don’t have financial freedom? Before anything else, use as much of it as you can afford to free yourself of debt.
Can you afford it… No? Well don’t buy it.
If you often have the conversation with yourself which goes like this:
“I can’t afford it… but I deserve it.” Walk away, because this is the typical attitude of individuals with high salaries but $0 savings. If you still have to work for a living but would prefer not to, then this attitude will only keep you working for longer.
It’s ok to break the rules rarely to get something you really want, but understanding how important that purchase is to you can be the difference between continuing to erode your savings or build your financial future. Asking yourself this question honestly and objectively each time you make a large purchase is vital in this process.
Do you Really Need it?
Following on from the previous point, if you can afford an item then the next question you need to ask yourself is, do you really need to buy it? I’m not talking about basics such as food and other daily necessities, but more gimmicky items. Take for example the Wine Bottle Glass (pictured right); whilst attractive and probably apt to many of our consumption levels, it's useless in practical terms.
It may look like the coolest thing since sliced bread but every cent spent on items that look cool but don't offer any additional value is equivalent to throwing your money down the drain. You need to ask yourself whether or not there's a high probability that the only thing this new item will be doing in a few months time is collecting dust.
To add more value to your life and save money wherever possible, view each and every purchase as a lifelong burden. Will the benefits of the purchase counterbalance the burden of buying and storing it.
The Self-storage Boom
Self-storage centres have popped up all over the world with the biggest demand for their services coming from all those people who regularly buy gimmicky, burdensome items as mentioned in my previous point.
Of course there are those out there who may be moving house or who are in a transitional period in their lives, so require these storage units on a temporary basis. But far too often, people end up requiring this additional storage on an ongoing basis as lines become blurred between "needs" and "wants" in this overly materialistic world. A testament to this is reality television shows such as ‘Storage Wars.’
Finally, I can’t emphasise enough that if you find an item on sale that you regularly use, it could be food or something else, buy it in bulk. This maximises the value of your purchase because you are paying less per unit, saving yourself time and reducing your travel costs to visit the store to buy that item multiple times. Just ensure you don't need to pay additional storage costs to house these bulk items!