What is the secret to financial independence? Having read several books on the topic as well as having talked to successful people, I have determined for myself that the common theme among those who are financially independent seems to be that they are, for the most part, frugal people.
Those coins will add up!
It does not take an expert researcher to figure out that we live in a consumer society. Everywhere you turn, you are being offered the latest, greatest thing to spend your hard-earned dollars on. The question is – Do you really need it? In my case, the answer is almost always “NO!”. I have not always been this way; I recall a time when I, too, used to spend money on things that I really did not need. For me, the items in question were musical instruments. I would spend $1000 to $1500 on the latest musical keyboard, only to sell it on eBay 6 months later for 1/2 or 1/3 of that price. Where is the financial wisdom in that?
Having spoken with those who are successful, I have come to the conclusion that in order to eventually achieve financial independence, once must make every attempt to keep unnecessary expenditures to an all time low. This does not mean you should deny yourself everything and count every penny. What it does mean is that a more enlightened approach to understanding where one’s money goes and thereby curtailing the purchase of things we do not really need is a big step towards the ultimate goal of financial independence.
Let’s take automobiles as an example. Some people such as myself buy an automobile to take me from point a to point b. For others, an automobile is a status symbol – One that requires a lot more financial upkeep and maintenance. I am not suggesting that one buy a 20 year old clunker that doesn’t even make it off fo the dealer’s lot. However, with so many good, reliable automobiles these days selling for a very reasonable price, why would I spend thousands of dollars more? I think it is by far more impressive and wise to set aside the money that would have been spent on this more expensive car on an eventual down payment on a property instead.
I enjoy cultivating the discipline of requiring myself to be frugal and spending wisely. It helps me understand where my money is going, even when I do not always do the right thing and do purchase an item I may not need. Understanding my spending habits is a big step in the right direction. Being aware of what I am spending my hard-earned dollars on is essential in my goal towards financial independence. Right now coupon sites are big business with discount codes on offer for all kinds of products. Some people will tell you it is “cheap” to use them but I have to ask you – if they are giving away free money would you say no? If it is as simple as typing in a code to save hundreds of dollars on one purchase you would have to be crazy to pass it up. Last week I needed a new phone and saved well over $200 on my purchase by using a verizon promo code. I think many people don’t realize that they can actually save money on regular expenses like cell phone bills by using promo codes – you can even use a straight talk promo code if they are the provider you want to go with.