Spend Less Than You Make

The 3rd Step to money mastery is – Spend and charge less than you make.

This is where we’re going to focus on spending only on your essential expenses so you have more of the money you make each week, left over.

Now for most of us, if we accidentally cut our hand and can see it bleeding we’d apply pressure and put a bandaid on it to stop the bleeding right? Of course! It’s common sense. If we don’t stop the bleeding and our blood for some reason wouldn’t clot then we’re going to be in big trouble!

Well the average person in most of the first world countries is actually spending more than they make. This is financial insanity! It’s like they’re bleeding financially and they most probably know it and what’s worse , they’re not doing anything to stop it.

Go ahead and do your own research and check out how many people in the country you live in went bankrupt last year. There are thousands and probably hundreds of thousands of people around the world who now have to have someone from the government look after their money because they’ve been unable to do it effectively for themselves. Not to mention the widespread stigma and embarrassment of bankruptcy and most bankrupts haven’t even got the freedom to go overseas on a holiday!

Let’s make sure that’s not you!

Now that you’ve tracked your spending you’ll have a clear idea of what you’re spending your money on ask yourself whether it is a need or a want? If you know your $5 a day on coffee is a want but you’re struggling to give it up then think how much does it cost you across a year? If you still think it’s worth $1825 then figure out how much it will cost you for the remainder of your working career? For example of you are 45 and have 20 years more at work then your $5 coffee actually costs you $36,500. Actually it costs you even more! Try $41,484 because that $5 a day could have been invested at 5%.

Are you ready now to give up that coffee a day and drink some water?

I trust so!

This is absolutely one area of your finances that you’re going to need to figure out because great wealth will never come to those who spend more than they make.