Why is it that we try to fool ourselves into believing that it’s not about the money? Of course that’s what it’s about. Make enough money to fill in the blank. (retire, take a vacation, provide for the family)
Yet very few of us actually know what “enough money” is because we never define our end goals. The tendency is to think no further back than the last paycheck and no further ahead than the next. This is reckless and dangerous behavior to your future.
Keep track of your finances
One of the best lessons that I learned from Robert Kiyosaki is the importance of keeping good financial records and balance sheets. I used to play his board game Cashflow 101 and 201 like there was no tomorrow.
The game was a great learning tool for reading financial data and making informed decisions based on unique situations. Before understanding this, most my “investments” were usually very short sighted and short lived because they didn’t fit in with my current situation. Upon learning this skill for understanding my situation, any money that I spend is critically analyzed for it’s best use.
Resources are easy to lose, but hard to gain.
I don’t know if you have ever played poker, but one thing was known in the poker world. Chips are hard to get, but easy to lose.
Same principle with money. It takes 40 hours a week to get that weekly paycheck, but can take you 5 minutes to buy junk and be broke again.
You have to start viewing money as a resource. It can either work for you or make you work even harder for it. This is a decision that each of us has to make on our own. How much do you limited returns of your time?
Spend for the future.
I’m not saying to start throwing money in retirement accounts. What I am saying is to think about the future when you want to spend money on something.
I have this habit of constantly questioning every expense I make. I ask myself whether this expense will either solve a major issue in my life, make a return on investment or save me time. If the answer is no to all three of these questions, I probably won’t spend any money on it.
The reasoning behind this is that I want my current resources to help me in the future either make more resources available or make my future life better.
Conclusion
In a nutshell, keep an eye out for discretionary spending and keep track of what you’re spending. You will be amazed at how much you spend on certain categories. You can’t fix what you don’t know is happening.
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