Chapter Content
Alright, so I wanted to talk a little bit about some financial wealth hacks, things I really wish I'd known, like, way back when I was, I don't know, twenty-two. And, a lot of this stuff is really about mindset, you know?
First off, frugality isn't about being cheap. It's about, well, it's about choosing the things you really, really love, the stuff you're okay spending a little extravagantly on, and then, you know, cutting costs like crazy on the things you just don't really care about.
And, this is a big one: ask, like, thirty-thousand-dollar questions, not three-dollar questions. We get so hung up on these tiny, little financial decisions that honestly don't even make a real difference. You know, they just keep us busy and thinking small. Like, the amount you spend on your morning coffee, it’s not gonna change your life. But focusing on those bigger issues, you know, investment fees, how your assets are allocated, negotiating your salary, mortgage interest, student loan interest... these are the things that actually move the needle.
Now, super important: always have six to twelve months of emergency funds in cash. I mean, seriously, when times are good, work hard and fast to sock away that emergency fund. This one thing alone, honestly, it’ll alleviate so much of the anxiety you feel when you're thinking about money, you know?
And, make a rule. Decide to save a specific percentage and invest a specific percentage of your gross annual income. And then, automate it! Establish an automatic deposit into your accounts at those percentages so that you actually stick to it.
Okay, another thing: spend only what you have. Avoid, at all costs, accruing interest on credit card debt. Seriously. Treat your credit card like a debit card. Just assume the money's leaving your bank account the second you swipe it. And pay it off entirely, every single month. No exceptions.
Plan ahead. I mean, rich people always plan *before* they need to plan. It sounds simple, but it's huge.
And here's one that's saved me a lot of money in the long run: buy the best and keep it as long as humanly possible. Sometimes buying cheap just ends up being way more expensive. Spending a little, or maybe even a lot, more upfront for quality, well, it saves you money down the line. For example, I like buying high-end electronics because they last longer, high-end clothes because they don’t tear as easily, and high-end cameras for the reliability. Some of these things can even be passed on!
Treat everything like a test. Seriously. When you sign up for a new cellphone plan, pick the most expensive one. Then set a reminder to check in on it after three months. Track your usage, and then downgrade accordingly. You should do this with everything, your cable, Netflix, gym memberships, magazine subscriptions, all of it. The best time to do it is, like, the month before you have to renew. That way, you’ve got all the power.
Be frugal with yourself, but be generous with others. It’s a good balance.
Now, if an investment or financial opportunity seems, like, too good to be true, assume that it is. Remember that old saying? There’s no such thing as a free lunch.
Okay, but index funds *really* are a free lunch. Seriously. Lowest costs, better returns, lower taxes, no effort, less risk. I’d recommend making at least 90 percent of your portfolio through index funds. It's just...smart.
If someone starts using a bunch of fancy words and jargon to try to sell you an investment or financial opportunity, don’t buy it. Just run. Run in the other direction, fast.
And stay invested in the stock market. It's so easy to panic and sell stocks whenever there’s a big drop in the market. But, selling your stocks when they’re down could be the worst financial decision you can make. Stop trying to time the market. Just create an automated direct deposit for a small amount of money into an investment account every month. Never look at the account! Don’t pay any attention to it!
Tip more around the holidays. Give a small holiday gift to any service industry workers you regularly encounter, your delivery drivers, trash pickup, cleaners, all those folks. It’s greatly appreciated by them, and it’s a simple way to spread some positive holiday vibes.
Set money rules for yourself. We all work differently when it comes to money. There’s rarely any one-size-fits-all approach to spending, saving, and cutting expenses. If you know you have a certain bad money habit, set a rule to help you avoid it.
Negotiate your bills down. It’s a little-known fact, but you can negotiate many of your bills with a one-time phone call. You can save hundreds a month on your car insurance, cellphone plan, gym membership – that's less likely, but still possible – cable TV, credit cards...it's simple. Call them, say, “I’m a great customer, and I’d hate to have to leave because of a simple money issue.” And then ask, “What can you do for me to lower my rates?” It really works!
Follow the thirty-day rule to save money. Seriously, take thirty days to think about any nonessential purchases or impulse buys before you make them. Once the thirty days are up, if you still want to make the purchase, go for it!
Be a conscious spender, not a cheap person. Cheap people care about the cost of something. Conscious spenders care about the value of something. Cheap people try to get the lowest price on everything. Conscious spenders try to get the lowest price on most things, but are willing to spend extravagantly on items they really care about.
Fight for simplicity in your finances. The more successful you become with money, the more you have to fight for simplicity. When you keep things simple, you can take control of your money and become much more decisive.
And finally, the way you feel about money is not correlated with the amount in your bank account. A lot of us believe that if we just had a thousand more, or ten thousand more, or even a hundred thousand more, we’d stop worrying about money and finally feel good about it. Bad news: no amount will actually change the way you feel about money. To feel good about money, you need to (a) know your numbers, and (b) improve your money psychology by spending unapologetically on things you care about, and then paying as little as possible for everything else. You know? Simple as that.