Tuesday, November 18, 2008

Living Stingy - A Way of Life

" Oh, Rochester!"

I know what you're going to say. "Oh great, another blog by some guy who wants us to re-use matches, or use only one sheet of toilet paper to save money."

I know where you might get that impression, but no, that's not what this blog is all about.

Too many "financial help" pages tend toward such extremes. With the recent downturn in the economy, magazines and newspapers and CNN have been publishing such useless drivel, like "Our family stopped spending money for a week!"

Those sort of articles are less than helpful because they are really just gimmicks. Cutting back on spending for a week can be instructive, but it also can just be a stunt, if you go back to the same old bad habits a week later (and end up spending double to replenish all the things you consumed during your "no spending" week).

No, what this blog is about is how to live RICHLY without spending a lot of money - and how to become WEALTHY both in mind, spirit, and bank account, without working too hard.

Can it be done? You bet it can. But it takes courage to go against the herd of sheep that is mankind, particularly in the United States of America, where overworking and over-consuming is a way of life.

I probably "make" a lot less money that you do. But I have more and I work less. I work maybe 20 hours a week, tops. You heard that right. How? Well, it didn't happen overnight. And I can't explain it in a word or two. And perhaps you can't do that. But there are some things I've learned you might be able to take advantage of.

Do I live the life of a monk? Hardly. I have three homes, two boats and six cars. Four of them are BMWs, three of which are convertibles. And other than one mortgage, all of it was paid for, in cash. I have had a net worth over a million dollars since I was about 35. I'm not super wealthy, but I ain't starving, that's for sure.

How did I accomplish all that? Well, it takes time. There is no "system" or "scheme". I am not selling cassette tapes or seminars. In fact, falling for "get- rich quick" schemes is the only surefire way I know to go broke.

The key is twofold: Habits and Planning.

Habits: This has been the hardest part for me, as I am, by nature, a spendthrift. I like to blow through wads of cash. If we're out at a restaurant, I (used to) like to pick up the tab and buy another round. Want to sell something? I am always a sucker for a new gadget or toy. Or at least I was. Getting into the habit of thinking carefully before spending took a lot of time - and it is an ongoing process. And I still "fall off the wagon" - a lot. But getting my spending habits under control was the first step.

Planning: This is really related to habits. If you have no plans for your life, it will be hard to do little other than live day-to-day, which is about the worst way to manage your finances. Taking the long view on things is essential to managing your money. There is an old Hebrew saying, "When a man makes plans, God laughs." And there is a lot of truth in that saying. But that doesn't mean you shouldn't plan at all - only that you should expect that things might not work out exactly as you expected. But some planning is essential.

In the coming entries I will try to enumerate some ideas that I have learned and come up with. Probably not much of it is original. But maybe it will help someone else out there.

It is possible to live better while at the same time spending less.  The key is to think carefully about what you are spending money on, rather than just divide up your paycheck into monthly payments.  Getting off the debt merry-go-round is the first step, but there are many other things you can do to cut expenses while still living the same lifestyle - if not a better one.

Stay tuned!