Wondering which way your money is evacuating from your pocket? Maybe there is no point in stopping it from doing that. Maybe it would be better to learn how to spend money and have money. Honestly, your spending is not a measure – it’s something different.
It doesn’t matter how much money you spend – your income is the case.
It won’t be easy to find a guy who will tell you that. But I bet that when you find him, he will be the most happy one. In fact, cutting your spending is not a way to have more money in your pocket. Proper way is through making your income bigger. Because cutting your spending won’t make your money flow into your pocket. You will only save some money, and cut your comfort of life. Don’t get too materialistic, but money defines big part of your life. When you cut your spending, you show yourself that you need less money. If you need less money, then you don’t have to work so much, so you get into vicious circle, when you end on a couch.
Focus on the income, spending will solve automatically.
Every guy who graduated from economy faculty knows, that our spending on food isn’t connected with our income. Also housing needs are not growing in the same tempo as income. It leads us to a point, when you solve your current financial needs, then further spending stops to be a problem. Because over certain level of spending, your curve of throwing money away will stop to grow so fast. At certain level you have a stable outcome, and everything additional are luxury products. Be honest with yourself, how many latest iPhone’s you will buy? One? Two? How many cars? One? Two? You don’t need third car for yourself. Also, the 10th pair of pants will be useless. So, you can see that your spending will drop in a scale of whole income.
When your income is rising, then outcome is not a problem.
Once one wise man told me that it is not a matter of cutting your needs, but expanding your list of income sources. He was spending a lot of money everyday, but his income was also growing constantly. In final outcome, he was a mastermind of spending money and having money. And the ultimate way of spending your money is buying assets which will bring you money over time. Then you can stop calling it throwing money away, and name it your empire.
If you are wondering how to say that it is not easy to get another source of income, then think about people who want to be rich only by cutting their spending. It can be a way to save money for financial reserve, but not for a new Ferrari. Additionally, if you are living in a “Western” country, then you surely have a way to get additional work. Only thing which can stop you from getting more than spending is yourself. Because if you want to limit your effort for a price of your comfort, then in fact you are doing financial regress.
Save 1/3 of income, and spend money on assets.
Few articles ago, in Three ways to have more money, I was writing about saving one third of your income. When you do so, then you can spend money on new assets, which will give you additional income. Mix it with a hobby – older cars value is constantly growing. Buy for five thousand bucks, and in five years you will maybe have two times more.