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Does Investing Over 25% Make You a Tightwad?

moneyguy2023 — Tue, 20 Feb 2024 15:00:39 +0000

Getting Out of Your Own Way to Achieve Financial Independence

The Money Guy Show — Fri, 23 Jun 2017 16:38:12 +0000

If you’re like most people, you’re probably your own worst enemy when it comes to achieving financial independence. Attaining this much-desired state is often a case of “getting out of your own way” by making better decisions, seeking wise counsel, and exercising patience.

Simply put, you have to stop sabotaging yourself. To stop all the self-sabotage, you must be aware of when you’re doing it. Fortunately, that’s the exact purpose of this post– to discuss the ways people commonly sabotage their financial independence.

Here is a list of the 9 ways you may be sabotaging your financial success.

What Exactly Is Financial Independence?

Financial independence means something different for everyone. It can mean everything from being able to move out of your parents’ house to amassing so much wealth that you never have to work another day in your life.

For our purposes, a person or family is financially independent, if they meet one of the following two requirements.

You are presently able to live comfortably without having to earn further income.
Your current financial situation is likely to lead to the above scenario, provided you continue to make sound decisions.

Self-Sabotage Through Poor Planning

Unless you are the heir(ess) to a massive (and well-managed) fortune, financial independence doesn’t happen by itself. It requires a detailed strategy to get and maintain financial freedom. Here are 5 ways that a lack of proper planning can sabotage your financial security.

An inadequate financial plan. The lack of a comprehensive and up-to-date financial plan is one of the worst forms of financial self-sabotage. Without one, it is hard to know what you are trying to accomplish within a specific time frame and how you will actually go about reaching your goals.
Focusing on the short-term, instead of the big picture. Your financial life is a marathon, not a sprint. All of your financial decisions should derive from a wide-angle view.
Not having documented, discernible financial goals. Well-defined financial goals are the sine qua non of financial independence. Not only do these goals motivate you to make wise decisions, they also provide a reliable metric for assessing your financial moves. Without financial goals, any map you might have is useless and without a destination.
Poor budgeting. This can mean your budget itself is inadequate or that you fail to follow through on it consistently. It is necessary to know where you spend your money and how to direct your hard-earned dollar bills according to your financial plan and financial goals.
Not seeking professional guidance from a trusted source. Not accepting professional help when your finances become too complex is doing yourself a disservice. Consider a financial professional to help you manage your financial life when you feel you could use the extra help to ensure you’re doing everything you could and should to make the smartest financial moves possible.

Self-Sabotage Through Poor Spending Habits

The second category of financial self-sabotage techniques involves your long-term spending habits.

Overspending. This includes living beyond your means, impulsive purchases, and exceeding your budget from lack of awareness.
Failure to track spending consistently.For most people, it’s impossible to spend wisely unless you understand how much of your money is going where.
Not saving or not saving enough. Absent a tremendous stroke of good fortune, you must save money to achieve financial independence. The right attitude is to treat your savings as you would any other bill. Allocating money to your savings each month must become a regular habit. Think ten to twenty percent of your gross income as how much you should be saving.
Living on borrowed money. The interest you eventually pay on credit cards and loans can cripple your financial life. Not only will it prevent you from saving money, an excessive amount of debt will also delay your ability to reach other financial goals beyond retirement savings, like education planning, vacation planning, or other miscellaneous financial goals.

The good news is that there is no need to feel discouraged or overwhelmed by any of this. Almost all of us are our own worst enemies when it comes to our finances. You don’t have to fix everything at once. Start by eliminating just a few of these self-sabotage methods and you’ll get the tangible results you need for motivation going forward.

6 Simple Ways to Save Even More Money Instantly

The Money Guy Show — Tue, 13 Jun 2017 23:29:34 +0000

Saving money can be challenging these days. There are so many expenses within daily life that by themselves seem insignificant. However, they can add up quickly, consuming a significant amount your income. When looking at all of your regular expenses together at once, the thought of reducing them and saving money can seem daunting. From cars and homes to food and entertainment the list of expenses seems endless.

Similarly, trimming costs and being strategic about how to meet financial needs can also add up to meaningful savings. Addressing a handful of these expenses one by one, here are suggestions to help you save more money now.

1. Understand Wants vs. Needs

This is the most obvious first step to eliminate the expenses that are not necessities. We’re not suggesting you become a hermit living in a van down by the river. We are, however, suggesting you evaluate what might be a frivolous expense that you can easily live without. Think one of our favorite financial principals: forced scarcity!

2. Explore Home Entertainment

Never underestimate the power of entertaining yourself, friends, and family at home instead of going out. You can still enjoy a film, nice dinner, perhaps cocktails and music… but at a fraction of the price. You will be surprised how refreshing hosting a game night in your home can be.

3. Reinvent Lunch

Buying lunch at work can seem like a small expense but this expense can really add up if you’re not careful. It is not uncommon for a moderately-priced lunch to be $10. That’s $50 per week and $200 a month, which could be a car payment. An easy way to stretch your food dollar even further is to make a little extra dinner and take the leftovers to work for lunch. Find a nice place to relax, people watch, and relish in your savings.

4. Consider Carpooling/Public Transportation

The cost of gasoline adds up quickly if you drive to work by yourself each day. Consider participating in a carpool/ride-sharing program, cycling, or taking public transportation to work if you can. Ride sharing can cut your gas expense way down and public transportation like buses or trains is not only cheaper than gas, it provides you time to read or even catch a few winks.

5. Discover Local Travel and Staycations

As summer draws near, an upcoming vacation may not be far off. When reviewing your choices, exercise a little restraint and consider a “staycation” in lieu of a costly vacation away. Staying in your home and hometown eliminates the hotel and travel costs.

Even if you elect to get accommodations near where you live, there are often discounts for locals and you still save on airfare. Being a tourist in your own city/town can be a lot of fun and with little to no travel time or travel stress, your vacation lasts even longer -a benefit that is well worth more than money spent.

6. Reorganize Grocery Shopping

Let’s talk about food. If you pay attention to our choices in the grocery store and prioritize price over luxury, your daily expense on food can drop. Additionally, consider buying some items in bulk, looking for “two-for-one” specials, using coupons, and storing/freezing the extra items you bring home. And, don’t forget the earlier suggestion for workday lunches!

The sum of numerous and seemingly small choices throughout our regular daily life can have a big impact on your life, freeing up money. Track your regular spending across the categories mentioned above for two weeks. Then incorporate the suggestions for another two weeks. You might be surprised by how much money you saved, which can then be put aside for safe keeping or used to treat yourself. Happy Saving!

How to Avoid Becoming a Miserable Financial Miser

moneyguy2023 — Fri, 05 May 2017 16:18:24 +0000

Don’t become an asset hoarder that distorts the benefits of being financially responsible.

Are you or your spouse someone who sucks all the fun out of the family finances? Even if the actions of being financially responsible are well-intentioned, a spending scrooge can damper any enthusiasm toward saving money or reaching financial goals.

At the Money Guy Show, you know we are huge fans of hyper-savers, and it is even a financial pillar we harp on routinely on the show and with our wealth management clients. Even so, we want to free you from the type of overzealous saving habit that casts a dark cloud over your financial enjoyment.

In this intervention, we mean episode, we are going to help you (or someone you know) from becoming a miserable financial miser. We give you a few tools that will allow you to experience joy and contentment while also striving for financial independence.

In this episode, we offer these helpful tools and tips:

The method behind forced scarcity
How to clearly define the purpose for your savings
How to calculate how much money you actually need to save
Effective ways to fund your financial goals without delaying all gratification
Our recommendations for setting your retirement income needs
Ways to stress test your estimated retirement income needs
What an intentional tax strategy can do for your finances
Why generosity is such a powerful financial tool

Resources mentioned on the show:

Fidelity Contribution Calculator

Fidelity Charitable

Schwab Charitable

Related Money Guy Show content:

How Much Money Do You Need to Retire? (U.S. News)

Setting the Amount You Need for Retirement the Right Way (Money Guy Podcast)

How to Stress Test Your Financial Plan (Money Guy Blog)

Tune In and Go Beyond Common Sense with the Money Guys

This show would not be what it is today without the support of our wonderful listeners. We strive to continue making the show better and your feedback is an important part of that process.

If you have any questions/suggestions/comments/concerns (or just want to say hi!), feel free to reach out to us: brian@moneyguy.com and bo@moneyguy.com. You can also join the conversation on Facebook or connect on Twitter @MoneyGuyPodcast.

If you enjoyed this episode, be sure to join our community! You’ll get immediate access to 15 of our most recent shows, plus you’ll get future podcasts delivered straight to your inbox so you can get in on the action right away.

How to Be a Retail Rambo this Black Friday

moneyguy2023 — Fri, 18 Nov 2016 21:23:19 +0000

Black Friday is coming and we want to prepare our listeners to be judicious spenders and maximize your hard earned dollars this holiday shopping season. In this episode of The Money Guy Show, we walk you through how to avoid the Black Friday gimmicks and get the greatest bang for your buck. Hold on tight, because we cover a lot of ground in this fun segment of our podcast.

Being a ‘Retail Rambo’ on Black Friday means that you’re zeroed in on the right deals and incentives to save an extra 3% to 20% more than other shoppers out there. It also means that you won’t be lured or fooled by the illusion of big savings that don’t really exist. If you’re a fan of The Money Guy Show, chances are a saver first and spender second. Well, just like we encourage forced scarcity and moderation when it comes to consumption, we carry these same principles with us on Black Friday. We want to make sure your money is stretched as far as it possibly can to get the greatest value for the items on your holiday wish list this year.

Ready to save big this holiday season? Here’s what we cover in today’s packed episode:

How to spot a Black Friday scam and avoid it
Understand retail tricks and determine which ones are worth your time
What needs to be in your shopping ‘tool belt’ this shopping season to save big
What “Off Brand Clowns” are and why you should be wary
Door Busters: Good deals or just bait?
How to know how much you’re actually saving (despite what the shiny sticker says)
Price steering and price targeting: What you need to watch out for
Must-have research tools to help you compare product prices across multiple retailers
The 3-step online shopping strategy that offers you a triple plan of attack on the best deals
In-store savings strategies that work to save you even more money
How to most efficiently spend your money this holiday
Ways to effectively leverage credit this season for more savings

Resources We Mention in this Episode:

Tune In and Go Beyond Common Sense with the Money Guys

This show would not be what it is today without the support of our wonderful listeners. We strive to continue making the show better and your feedback is an important part of that process.

Maximizing the Magic: All the Ways You Can Save Money at Walt Disney World

moneyguy2023 — Fri, 21 Oct 2016 17:40:03 +0000

In this episode of The Money Guy Show, we have compiled a list of tips and tricks that will help you stretch your wallet and maximize your time when you plan your next Disney getaway. Tune in to hear Brian and Bo share their insights for maximizing the magic at Walt Disney World and also get an inside peek at Brian’s most recent family trip to Disney World while Hurricane Matthew slammed the East Coast.

We’re covering this fun and unplanned topic this week because, for most people, when you plan for retirement and financial independence, one of the ground floor goals is to spend more time with family and traveling. This is a powerful goal because memories made with family or on a good vacation are timeless and priceless. A dream of many is to combine these goals and load up the family to visit Walt Disney World. Unfortunately, the “most magical place on Earth” is also one of the most expensive places on Earth. Join us this week as we explore ways you can enjoy the magical Disney experience without breaking the bank.

Here are a few highlights from this episode:

How to book a Disney hotel on the cheap
Ways to save a bundle of money by planning in advance
What you need to know about the power of 180 and how it maximizes your Disney experience
Why you should take advantage of Magic Bands and My Disney Experience app
Should you do the Disney dining plan or not?
And a few other super fun secret perks all Disney World goers need to know about

Links and resources mentioned on the show:

Tune In and Go Beyond Common Sense with the Money Guys

This show would not be what it is today without the support of our wonderful listeners. We strive to continue making the show better and your feedback is an important part of that process.

The Best Money Advice You Can Put Into Practice Today

The Money Guy Show — Fri, 16 Sep 2016 20:58:52 +0000

Did you ever wonder what the best money advice that you’ve ever received was? This answer can certainly vary from person to person depending on who you ask and what their experience with money has been. So we decided to ask some of our financially-minded colleagues how they would answer this question.

What we discovered was some incredibly useful money advice that you can start putting into practice today. It’s never too late to start practicing smart money behaviors and some of these ideas might be new from the traditional money advice you’ve received in the past.

Here are five of the best money tips you can start acting on right away.

1.Invest Early

This money tip is tried and true and will likely always make the list. There is just no substitute for starting your saving plan early and allowing even the smallest amounts of your money grow over the long term. The power of compound interest is real and its ability to set you up for future success is undeniable.

We cover this topic at greater length in this related article: Get Into Good Financial Shape When You’re Young

2. Get an Estate Plan

When we asked our good friend Joe Saul-Sehy of Stacking Benjamins this question, he responded that estate planning is probably the best financial advice he ever received. The reason for this is that estate planning is something each of us knows we should take care of, but tend to put off. When he and his wife went to have their estate plan done, both of them felt a little shocked by how happy and relieved they felt having put all their important financial matters in order in the event they were unable to do so themselves.

Really, there are some hard things we all have to do and facing one’s mortality is never easy. Joe’s advice is to make a list of those four to five things that you ought to be doing and then get after it. The sooner you get it done, the sooner you can set and forget about it with a greater sense of peace and security.

3. Work With a Sales Professional

We just loved this advice from Dr. Sarah Fallaw of DataPoints. The best money advice she ever received was to work with a sales professional, which seems strange until she explains why. Her insight revealed that the best sales professionals with the highest performance are also the ones that tend to deliver the best experience. There is a reason why they are high performers. When you are looking to negotiate a deal or make a large purchase, ask to work with the best sales professional so you can receive the highest value when engaged in a financial transaction.

4. Leave Empty Handed

Dr. Sarah Fallaw also added that another bit of good money advice that she has received was permission to leave the store empty handed. She remarked that sometimes you don’t have to buy something if you don’t need it or don’t find exactly what your’e looking for. It’s OK to walk away from the store empty handed. Just because you walk into the store or spend effort trying to find something, doesn’t mean that you are obligated to purchase. Delay your purchases and be more selective until you can acquire what you really want or need.

5. Invest in Yourself

Financial blogger, writer and speaker Michael Kitces, CFP believes investing in yourself first is the best money advice he ever received. He observed what you do right now with your time and energy matters. If you can find ways to become better at what you do everyday then you can build on your income and financial resources. Increasing your education and skill set is a way to improve your chances of long term financial growth and success. You are an investment that can yield the highest return. Think about the ways you are spending your money now and evaluate adjustments you can make so that you are developing a new skill or enhancing an existing one.

What is the best money advice you have ever received? We want to hear from you. Email me directly at Brian@moneyguy.com, Tweet to us @moneyguypodcast using #bestmoneyadvice, or share with us on our Facebook page!

Also, be sure to listen to us talk about this topic at greater length on our Best Money Advice You’ve Ever Received episode of The Money Guy Show!

5 Ways to Build Wealth (and live a happier life)

The Money Guy Show — Fri, 02 Sep 2016 20:10:17 +0000

Financial security and stability is something that most people want. It’s also something that most people aren’t entirely sure they have.

According to GoBanking Rates, 62% of Americans have less than $1,000 saved in their bank account. The Federal Reserve Board reports that as many as 47% of Americans wouldn’t be able to cover a $400 emergency without borrowing money or selling something. These are some startling statistics that reveal Americans today are not successfully building wealth for their future.

So what can we do? What can be learned from past financial mistakes or missteps so that you are able to build wealth for your future? Regardless of your financial circumstances today or how old you are, there are five important ways you can start or resume building wealth. And the best part: you may even live a happier life in the process.

Here are five big tips to start building wealth and never stop.

1. Defer Gratification

Yes, defer gratification so that you can build wealth. When you stop yourself from purchasing everything you want right when you want it, you become more selective about your spending. This behavior allows you to give yourself a “cooling off period” so you can determine if it’s a purchase you really want, as well as save up the money until you can afford that item in full at the time of purchase. Even if you want something, it is always a good idea to step back and consider if it really makes sense financially. “Live like no one else, so you can live like no one else in the future.” – Dave Ramsay

2. Look For Big Opportunities in Dark Moments

“Be fearful when others are greedy. Be greedy when others are fearful.” – Warren Buffet What this means is to buy low and sell high. Really, it’s most valuable to simply be aware of your own human behavior in these economic moments. How are you invested? We recommend that you save 15-20% of your gross wages going toward the future and live debt free. Beyond this, it’s putting yourself in the position to ride out economic turmoil without panicking and taking advantage of dislocations in the market. Working with a financial advisor on what this looks like for you can help you see and seize opportunity in such moments.

3. Invest in Yourself

It takes five years or 10,000 hours to master something. We encourage that you learn as much as you can so you can better yourself in the future. Avoid the get rich quick schemes. Instead, learn and hone a marketable skill set so you can potentially earn a higher wage and set yourself up for long-term income growth. When it comes to your finances, long-term is your friend. Just as a financial strategy grows and builds wealth over time, so too does your income when you learn and grow your own discipline.

4. Make Best Use of Your Time

Make sure the things you are spending your time on are really making the best use of your time. It can be too easy to get busy doing nothing. When you consider how you spend your time in any given day, are you spending it in ways that align with your passions and interests? Living a life that makes the best use of your time can have a powerful impact on your ability to build wealth. This is because you focus on the things that make you happy and remain steadfast in your desire to increase these opportunities. Whether it’s taking a family vacation or enjoying a hobby, traveling someplace new or even learning a new skill. Whatever it is for you, we encourage you to protect your time and spend it in ways that are truly fulfilling. Wealth comes in different forms and extends beyond money to other areas of your life that matter most to you.

5. Don’t Be in a Hurry

Lastly, try to not be in such a hurry that you don’t enjoy each moment of your life. It can be easy to fix on the future and the next thing you’re trying to accomplish and miss the fulfilling and rewarding moments happening right now in the present. Slow down and smell the roses so to speak. It may sound fluffy, but slowing down can help you evaluate situations with a clearer perspective so you make more intentional decisions with your time and money.

To hear us talk about this subject in more detail, be sure to listen to our podcast episode, “I Wish I Knew Then What I Know Now About Building Wealth.”

The Secrets to All-Inclusive Travel

moneyguy2023 — Fri, 29 Jul 2016 14:00:52 +0000

The Secrets to All-Inclusive Travel

One of the primary things you dream about as you work towards financial independence is the day you get to travel and enjoy the fruit of your hard work. Most of those fantasies include a tropical beach, a cold adult beverage, and the smell of sunscreen. Unfortunately, many of us become such proficient savers that we have a hard time letting go of the purse strings to actually start spending.

From those that are naturally thrifty all the way to those who are the exact opposite, there is a fantastic solution to help build memories through travel: all-inclusive travel resorts. These resorts were pioneered in the 1950s and have become a go-to solution for honeymooners, beach lovers, and retired travelers. The concept is simple and genius: you prepay all of your travel expenses including hotel, food, beverages, and entertainment when the trip is booked. This allows you the immediate benefit of budgeting your trip months in advance, and, once the trip begins, you can create a game plan to maximize the benefits of having an all-you-care-to-enjoy vacation. As cost conscious travelers, we have some experience and want to share some of the planning tips and tricks to help you understand and maximize the all-inclusive travel experience.

Know Where to Do Your Research

TripAdvisor is a dominant resource because it allows fellow travelers to post their reviews and pictures so you can get an understanding of what your experience will be like along with planning tips and pitfalls to avoid.
- Maximize the power of the searchable customer reviews. It is powerful that you can search TripAdvisor’s customer reviews for specific details. Curious about the dress code at the resorts restaurants? It is easy to find the answer and experience of others by using the search function.
- Be weary of the bright-eyed, bushy-tailed honeymoon reviews. Generally speaking, it does not take too much to impress new, young lovebirds who can barely take their eyes off one another. Considering that “honeymoon bias”, those reviewers may not be the best resource for determining how good a resort’s rooms, food, entertainment, or service is. Look for reviews from travelers that may have a bit of experience.
YouTube is your visual aid friend. Trying to decide between two different resorts or room types within a specific resort? YouTube can provide the visual information you need to make that well-informed decision.
com is known for exposing the difference between reality and fantasy. The site offers picture comparisons between resort website pictures and actual photos taken by the site’s staff. They also offer a pretty good resort analysis and critique.

Become a Booking Bandit

Leverage the ability to price shop and compare on the Internet and booking websites. Don’t forget that most airlines also offer their own travel agent services. Southwest Airlines, for example, does not allow their airfares to be purchased through any of the traditional aggregation sites, so if your city has a Southwest hub, be prepared to book directly through Southwest and their travel sibling Southwest Vacations.

Once a provider is chosen try to layer discounts.
- com – many travel providers offer 1-3% cash back if booked through the eBates portal. Who doesn’t love a rebate of $40-$200?!
- eBates and Retailmenot will also have coupon codes that you can potentially apply to your vacation.
See if your special occasions qualify you for free stuff! It is not uncommon for resorts to offer exclusive dining experiences (candle-lit dinner on the beach or 2 for 1 spa packages, for example) to honeymooners and couples that have celebrated, or will celebrate, an anniversary in the last or coming 30 days (to ensure you receive your upgrade, bring a copy of your marriage certificate). Birthdays can also be celebrated with some special recognition by the resort.

Know What is Included and What is Excluded

Benefits of all-inclusive travel are lost if you plan poorly and become a victim of upgrade surcharge shock. Areas to pay attention to are:

- Airport transfers – you will need to arrange your transportation to and from the airport to your resort. A few upscale VIP resorts will include this in their price (they offer their own luxury transportation). However, most will require you to purchase this in addition to your all-inclusive package. The transportation companies will often use this opportunity to sell additional excursions and entertainment while you are traveling. This may be convenient, but remember that haggling and price negotiation are reasonable and expected.
- Understand what food and beverages are included. Just like airlines have learned there is additional profit in charging for checked bags, snacks, and wifi access, all-inclusive resorts have learned there is money to be made by offering additional premium upgrades. There is nothing wrong with this except for sometimes you may not realize you are being offered something that is an additional charge. Pay attention specifically to:
  - Upgraded wine choices at dinner. They will offer you a wine list with upgraded prices provided, but what they don’t usually put forward is that there are similar house brands that are included in your base package.
  - Spa services are obviously an upgrade, but recently resorts have also started offering additional specialized lotions and creams that may be a premium on an already purchased upgrade.
- Water sports- many resorts will provide complimentary access to snorkeling gear and kayaks, but do not assume it is included. Verify before you travel. Also know that motorized jet skis, jungle tours, ATV rides are extra and will need to be booked separately from the all-inclusive booking.

Be Wary of Time Share and Membership Pitches

Yes, it is great to get a $220 couples massage or surf and turf dinner on the beach for what they present as “free”. The catch is that you just need to participate in their sixty minute tour and explanation of their special membership or loyalty program. It is not uncommon for these experiences to last well over three hours and to turn into hardcore sales presentations. Recognize that your vacation time is very valuable, and it may make sense to pass on the perceived free stuff if there is a catch.

Traveling is a healthy spending goal, and one that we encourage our clients to make. The driving force behind that recommendation is that travel can be the gateway into creating lifetime memories for you and your loved ones. You also never know what life event or cultural exposure will spark that great idea or innovation for you or a loved one. So, regardless if you decide that all-inclusive travel is for you or not, try to create a bucket in your long-term goals for traveling and experiencing this awesome world we live in.

Tune In and Go Beyond Common Sense with the Money Guys

This show would not be what it is today without the support of our wonderful listeners. We strive to continue making the show better and your feedback is an important part of that process.

If you have any questions/suggestions/comments/concerns (or just want to say hi!), feel free to reach out to us: brian [at] money-guy.com and bo [at] money-guy.com. You can also join the conversation on Facebook or connect on Twitter @MoneyGuyPodcast.

The Path to Wealth and Financial Freedom

The Money Guy Show — Fri, 27 May 2016 13:00:59 +0000

Do you have what it takes to become wealthy?

I mean truly wealthy, and not the pretentious examples of wealth that are only defined by luxury cars and guard-gated neighborhoods.

If you’ve followed the Money Guy Show for a while and applied some of the tips you’ve learned over the years, perhaps you do. But for many others, you may be shocked to know that the reason most individuals are not on the road to affluence is simply because they take the easy way out.

The allure of instant gratification has a lot to do with it. By giving in to the desire to get what you want, when you want it, you are undoubtedly causing irreparable damage to your long-term financial health.

There is a silver lining, though.

If you find yourself slightly off track on your path toward financial freedom but you’re willing to make changes, all is not lost. With a little effort, you can change your course and take the steps necessary to reach your financial goals.

Here are a few tips to help you get back on the path toward wealth and financial freedom.

Change Your Mindset

When it comes to amassing (and sustaining) wealth, there’s a certain mindset that is required. For instance, if you’re not yet on the path to building wealth, your spending plan when receiving a paycheck probably looks a little like this: spend some, pay bills, and save whatever is left.

The flaw in this way of thinking is that after taxes are taken out and the bills are paid, there is very little — if any — to save and grow.

Unfortunately, this is the backward thinking that results in very few people experiencing true financial freedom.

Ideally, saving for your financial goals should be the first priority. These are things like establishing a fully-funded emergency fund or planning for an early retirement. This is directly followed by paying bills and then spending whatever is leftover.

Now, of course, this is not suggesting that you become a miser who socks away every penny and lives on ramen noodles and black beans. In fact, this change of mindset doesn’t even require putting away large amounts of money at a time and living off the scraps.

As with any major change, taking small steps is the key to sustaining the behavior.

Start by saving any small amount that you can afford — whether that’s $25, $50, or even $100. No matter how small you start, if you stay the course, you’ll start to see progress and build momentum.

That momentum is oftentimes enough motivation to encourage you to continue the behavior over and over again until you reach your financial goals.

Take the Path Less Traveled

Taking the “path less traveled” usually means doing something contrary to the way it’s always been done. And there’s often a lot of trepidation when it comes to actually charting out a path toward the unknown.

When it comes to financial behavior, many people tend to do the things that are most familiar. And although there’s a certain level of comfort that comes with doing what you’ve always done, this seemingly insignificant action is one of the key differences between the affluent and the average.

The average individual sticks with the status quo and hopes that life will improve. This is normally the result of fear associated with the decision to forge a different path.

This leads to things like:

Putting off investing in your Roth IRA or maximizing your 401k at work and instead using the money to maintain your appearance
Hating your boss and job, but doing nothing to change your situation
Putting off the dream of being self-employed

This runs in direct contrast to the affluent. Those on the path toward wealth don’t leave anything to chance and actively control the things that they have a direct impact over.

Don’t fall into the trap of delaying good money habits until “later,” when life gets easier. You know, when your income increases and you’ve got a good handle on everything that life is going to throw at you.

We all know how this plays out and it rarely ends well.

Unless you have a plan in place early on, the moment your income increases, the demands on your money will as well. Don’t simply hope that things will work out, be willing to do the difficult work to ensure that they do.

You will begin to see that over time, the financial behaviors that you established early on, eventually become the cornerstone of your financial independence.

Live Like a Real Millionaire

Our society does an excellent job of selling the narrative that in order to be rich you must routinely level-up your lifestyle and consume all that you bring in. But collectively as a society, our high consumer debt balances, and poor bankruptcy statistics paint a picture that something is wrong with this methodology.

In his book Stop Acting Rich… And Start Living Like A Real Millionaire Dr. Thomas J. Stanley shows that contrary to public opinion, rich people — those with true wealth — don’t usually live a lavish lifestyle. They don’t drive late model, fancy cars. They don’t live in elaborate, showy houses.

They generally live unassuming lives, in middle-class neighborhoods, without all of the material trappings of what most consider to be “rich.” Truly wealthy people don’t spend money just to spend it. They invest money. And, as a result, their money makes more money.

With every financial decision you make, you should be thinking long-term and determine whether the choice runs counter to your ability to accumulate wealth. The last thing you want to do is leverage your financial future.

By changing your mindset, avoiding the status quo, and living within your means, you are well on the way to achieving wealth and ultimately, financial freedom.