It never ceases to amaze me when people who are seemingly “well
to do”find themselves in a financial bind. It could happen anywhere to anyone.
Take my businesswoman friend, for example. She is talented,
experienced and almost always wins over her rivals for corporate contracts. She
earns a lot of money and then splurges it. She is constantly recruiting and
hiring new employees, because her current ones cannot be paid their wages.
She intermittently calls me and some of her other friends to
request for advances to pay for her bills. Her credit cards have been
cancelled, because she could not pay for any of it.
Many homeowners in America had to give up their new homes,
because they could not pay their monthly amortization. It is regrettable for
those who lost their jobs, but there are others who deliberately applied for
bank loans to buy homes that they know they could not afford.
What drives people to spend more than they could ever earn?
What drives people to buy things that are way beyond their means? What drives
people to go thru life like there was no tomorrow?
There is one philosophy that is worth emulating. I’m
referring to Dr. Denis Waitley’s “delayed gratification” concept, which is highlighted
in his program, “The Winners Edge.”
If people will realize that it is so much easier to save for
our “dream vacation,” “dream house,” “dream car,” etc., there will be less
trouble in relationships and more financial security for our future.
Let’s take a look at five practical ways to financial
security:
1. Always spend less than your earnings. This way, you can
set aside at least 20% of your income, 10% to be placed in your bank savings
and 10% to be placed in investments;
2. Make a list of your expenses each month. Cross out items
that are frivolous and wasteful, and give up expenses that you can do without.
This will help you to save a little more money each month.
I gave up having a personal driver, when I realized that it
is more practical to take taxi rides, and how much money I was wasting on a
driver who did not drive everyday, since I didn’t go out everyday.
3. Postpone purchases or trips that will “cripple” your
credit cards. Plan your shopping and holidays way in advance and make sure that
it will not eliminate your savings.
I gave up two overseas trips last year, when our business
was struggling. I’m finally planning to make one or two trips to attend
education conferences next year, only because our business has improved
remarkably well this year.
4. Look for ways to augment your current income. I know
people who have added substantial amounts to their savings by getting involved
in marketing and selling items that are consumables, thereby ensuring that they
will always get repeat orders from their customers.
5. Find a reliable, competent and honest investment
counsellor, who can help you start a “nest egg” for your future.
I’m so glad that I have a toastmaster friend who fits this
bill, because the investments that she recommended to me have provided me with
much needed extra funds for emergencies, like the sudden passing away of my
husband last year.
We can all achieve financial security, as long as we make a
firm commitment to stick to a disciplined lifestyle and observe frugality.
Here’s a video interview on my thoughts about frugality for
your viewing.
