(Guest post by Hank Coleman)
I hate budgeting. There, I said it. That can’t be a popular stance to take on Budgets Are Sexy. Budgets are not sexy. They suck actually. I’m here to say what many of J. Money’s readers probably feel but don’t want to say. We read this blog (me included) because one day we don’t want to budget our money anymore. Our dream and goal is to have more money coming in than we spend every month… so much more that we don’t even have to have a budget. That’s the goal: to make budgeting obsolete.
But, I’m here to tell you that we are doing it all wrong. You think about conquering your budget from the wrong side of the fence. You can’t conquer your budget by pinching pennies. You have to do it by crushing your income.
Cutting Out Cable Channels Sucks
I love having two hundred high definition channels from my cable television company. And, the way I see it is that they are actually saving me money in the long run. Many personal finance blogs throw out the easy fix of cutting back on your cable television programming as a way to save money from your tight budget, and that is absolutely true. Dropping from 200 channels paying $150 per month down to the bare bones basic package could save your hundreds of dollars per year.
But, what about the sacrifices to the quality of life that you are making? Is it worth it? Will you fill the void of less television channels with something else, maybe something even more expensive? I found out when I dropped my cable package a few months ago that I got incredible bored sitting at home, reading books, and simply watching old DVDs. I was saving a fortune initially, but then I started to go out to the movie theater to see more movies or buying new releases on DVD. Taking my two children to the movies with me quickly racked up to $40 a trip to the local movie theater if you include tickets, popcorn, and drinks. And, the movie theater wasn’t the only suck on my wallet.
Now with all of our free time thanks to the elimination of our cable television, my family and I had more time on our hands to explore our city, visit the aquarium, and see a baseball game. You do not have to be a rocket scientist to realize that these activities quickly started costing me more money than I was actually saving by ditching my cable channels.
Look At The Other Side Of The Fence
Cutting unneeded expenses out of your monthly budget will only get you so far towards financial success and the freedom from living paycheck to paycheck that over 70% of Americans dream of. Most people forget that there are two sides to the cash flow equation. You can either cut expenses out of your budget to make ends meet (which Jay just so happened to blog about – damn him), or you can increase your income. We work hard at our day jobs, and telling people to get another job is rarely popular advice. But, adding income is an easy way to make up the ever widening gap between what you spend and what you earn, and it can help you find that elusive financial peace of mind that so many people are looking for. I’m not saying that you have to get a complete second career, and I’m not suggesting that you have to work another 40 hours per week. I think that J Money has hit the nail on the head with his Side Hustle Series. Working odd jobs or part-time jobs can have a huge impact on your budget and may be able to help you escape from having to cut your expenses to the bone.
How Many Dudes Bought The McMansion By Clipping Coupons?
Robert Pagliarini said something in his book, “The Other 8 Hours“, which really struck a nerve with me when I was reading it. There is always at least one nice neighborhood in every town with McMansions and manicured lawns. I’m sure you know the one street in the city you live. How did these people amass their wealth? Unfortunately, it wasn’t from clipping coupons or cutting things like 100 cable channels off of their television cable bill. These folks created something. They created a blog, wrote a book, invented something, started a business, or created some other profitable venture? Eighty percent of all millionaires in America are the first one in their families to reach that mark and not the trust fund heiresses that we all think of first in our minds. The millionaires around us are creators. They are income producers.
You will never become rich by simply cutting expenses from your budget. Eventually there will be a time when you cannot cut anymore. Something will have to give. You hold the key to making your budget obsolete. By looking at the other side of the fence, the income side of your budget instead of the expenses, you can gain the financial independence and peace of mind that you have always wanted. It is your income that you should be focusing on and not solely on cutting expenses.
Hank Coleman blogs at Money Q&A where he writes about personal finance, investing, and retirement and also tackles any personal finance question you throw at him. Be sure to sign up for his RSS feed to ensure that you don’t miss a single article.
EDITOR’S NOTE: I like this article cuz it reminds us there are two sides to the equation here. Sometimes I fall into the “income generating” one (actually, MOST times I fall into that one), but then there are others like right NOW where I’m alllll about getting rid of my (major) expenses. It’s a balancing act for sure, but I agree that both sides are pretty important for financial freedom.
(Photo by LosAnheles)
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What if you do both? We budget down to the penny and make above average income. Sure we could buy the mcmansion and drive the benz but we don’t. therefore we sock away about $52k after tax dollars towards investing, saving, and paying off the house each year…..Boo ya! We’ll get our mcmansion soon enough but we will pay cash for it and it will be because we budget the hell out of our finances.
as part of our getting out of debt, cutting our budget back was ONLY the first step. we’ve cut and its as lean as it can be. getting the debt paid off will only make it leaner. The next step and the only way we can increase that surplus going to debt is to increase the income which i think is the 2nd step. good article, except that instead of paying for movies and other entertainment we found LOTS of free entertainment to do in lieu of our cable TV.
I think you have to decide what is important to you. If having 200 channels adds the quality of your life, by all means, go to work and earn the money for 200 channels. I personally almost never turn on my TV, so for me it would not be worth it. I have been there and done that. I have gotten rid of my McManison and my cable. Honestly, for me, work was just a means to raise the resources to build enough passive income to not need to work. No one is going to be impressed by my home or my possessions. But I have the things that make life meaningful, enjoyable, and worth living, –and lots of time to enjoy them.
Maybe you can’t get rich by cutting your budget, but you can sure get poor in a hurry by not setting and following a budget. Focusing on just income is just as faulty of a strategy, because many people fall into the trap of ‘more income, more spending’ which isn’t going to get you rich either. The best strategy is to increase your income and decrease your expenses. Two sides!
Budgeting doesn’t necessarily mean cutting out anything enjoyable. It’s about finding out where your leaks are and plugging them so that you aren’t spending in places where you don’t want to be. Eating out is a huge one for most people. I enjoy eating out too. When I budget XX dollars for it, I am perfectly fine with it. When I don’t budget for it the amount tends to get away from me.
It is absolutely a balancing act, but one of the biggest mistakes that people make is focusing only on the cutting side of the equation. Far too many people do not even consider increasing their income as a way to help them out of their situation. They simply forget about that side.
A couple of points:
When you cut cable it was your choice how to spend that spare time. Instead of sitting on the couch there are thousands of things you could be doing that are free such as going out for a walk, learning a language, visiting with friends, free art and street festivals. You didn’t have to fill the time with movies and books. Exploring the city doesn’t have to cost you a lot of money. Having kids this would have been a perfect way to show them you don’t need to spend money to have fun and be entertained.
I recently gave up cable completely. I have antenna tv so do still get a few channels, although there is very little worth watching. I love it. I actually do so many other things with my time. I’ve learnt to sew. Picked up knitting again. Decluttering my house (slowly). Gardening more. Training for a marathon. Keep up with house chores and maintenance. It how you choose to spend the time that is important.
Secondly, to your point about a side hustle. Well, isn’t that what you could be doing with the time not watching 150+ tv channels?
Nice blog – it bears some striking parallels to the current debate happening between Republicans and Democrats in Congress right now.
Democrats = side hustle = increasing income = taxing the wealthy
Republicans = cutting the budget only = removing some essential pieces from life e.g. cutting health care which makes people sicker which adds to the debt (i.e. cable channels)
According to this blog and what it takes to keep the bare minimum American way of life (and sanity), the Democrats’ stance is more reasonable.
Sometimes it’s not about being super rich and having the McMansion. Sometimes, it’s just about living simply so you have the $$ to do what you most enjoy doing. And personally, I’d rather live simply and peacefully, that spend every waking hour working just to be able to have cable tv with hundreds of channels that I don’t have time to watch…cos I working. Having worked seven days a week for a year to clear all my debt (except mortgage) I realised how precious my free time was. I’d rather work less and enjoy MY time.
There is an exception to this: for those people who are strongly passionate about something then there is motivation to work long hours and have little, if any, free time. I’m not one of those people.
“We read this blog (me included) because one day we don’t want to budget our money anymore.”
Not true, the more money, the more important the budget. How many NBA players, NFL players, Hollywood stars and lottery winners have declared bankruptcy despite making the type of money you’re talking about? A budget doesn’t have to be a drag, it feels like a drag when your at the bottom of the hill, but it’s a lot of fun when you have money to give, save, invest and spend — or so I’m told.
In regards to cable, you seem to be arguing that you can only reallocate the time/energy you spend watching cable to “books and old DVDs”. You then say, ” I was saving a fortune initially, but then I started to go out to the movie theater to see more movies or buying new releases on DVD.” Which begs the question: did you budget for them? You’re paying $150 for 200 HD channels. We’re paying $7.99 for netflix, and watch a few series on Hulu. The results are staggering. Our old cable bill was something like $95 a month, and we’d watch whatever was on — even when there was nothing good on. Now, our watching habits are more deliberate. We don’t watch local broadcasting. We watch only what we like, no commercials (save the short few ones on hulu now and then). This actually saves on movie theater trips, because we never know when a new movie is coming out. Moreover, we watch less TV, devoting more time to reading, spending time with friends and playing with our baby (one expense that made us cut out the cable).
“Most people forget that there are two sides to the cash flow equation.”
I think that isn’t the case at all. I think most people like advancing and making more money. The problem is life inflation. studies have shown that most people increase their spending and life style when they receive pay bumps. People also inflate their spending to match the people around them. The best place to be to become a millionaire is in the cheapest house on the block, making the most income on the block, and carrying the least (preferably no) debt on the block. That said, I agree everyone has to work on raising their income, too.
“[A]dding income is an easy way to make up the ever widening gap between what you spend and what you earn”
Hold it, you said we were budgeting. If we are budgeting, that gap can only be widening the other way — What we make being much higher than what we spend. If your spending more than you make, your not on a budget (or you budget the way congress does — which doesn’t work in real life).
“There is always at least one nice neighborhood in every town with McMansions and manicured lawns. I’m sure you know the one street in the city you live. How did these people amass their wealth?”
Dr. Tomas Stanley has looked at this in very close detail. The McMansions are owned by two types of people:
1. The glittering rich
2. The aspirationals.
Most of the McMansions are owned by #2. People who have high income, but little wealth. Most McMansions are leveraged to the hilt, and underwater in this housing market. Most millionaires, on the other hand live in houses costing $300,000, where the average house in the US the year his book was published was $207,000; most mansions cost between 500,000 and several millions of dollars.
Granted that the median income of millionaires is $131,000. That said, their total annual realized income is less than 7 percent of our wealth. Also, an interesting tidbit, if you have a friend who is Scottish and seems like a real cheap skate, have him manage your money. More than 60 percent of Scottish-ancestry millionaires have annual household incomes of less than $100,000.
So, in short… I agree that you have to work on both ends of the equation (unless you’re making 80K or more), but America has a consumption problem (and a borrowing problem to feed that consumption). Moreover, the more money you make the more important it is to have a real written budget.
I don’t totally agree with this article but I will agree that there’s way more articles on the importance of being frugal and way less on increasing income. No matter how much money you make you should manage your finances and that means budgeting at some level. However, previous commentors pointed out you need to focus on living within your means and you also need to focus on increasing your income.
I found the cable example interesting because I just blogged about my no-cable setup. lol
I don’t agree with your premise. Cutting expense is the first step to prosperity. Anybody can cut expense at anytime, no matter what the economy is like. Offense (income) comes and goes, but defense (expense) just require a lot of effort. No matter how much money you make, you can always spend it all and then some.
I have to say I agree with the premise, unlike a surprising number of commenters.
It always strikes me as a little odd when people will go out of their way to save $0.50 per gas fill-up or $1 off a can of stewed tomatoes, instead of thinking about how they can grow their income. Even babysitting a few hours a week will give you more money than my example savings.
I do think you need a balance though. You need the budgeting baseline to form the correct mindset, otherwise all the income in the world won’t matter.
The Government has $14 trillion in debt (Equal to our GDP). Last year it brought in $2.381 trillion in revenue and spent $3.552 trillion. Of that only $18 billion in interest payments (no extra principle payments). 1 Trillion dollars, by the way, is enough money to pay the rent of all renter in the US for 3 years, or all the home mortgage payments of all home owners for 13 months. We don’t have a income problem, we have a spending problem.
We are engaged in two wars. Our Military spending last year was $698 billion which is $584 billion more than China (who is second in the world in military spending), and all other countries (besides US and China) spent less than $70 billion.
The federal Department of Education was established in 1953, since that time standardized test scores have fallen and cost per student has risen substantially. Most states already have a Department of Education, and most municipalities or localities have a school board. The Department of Education spends $46.7 billion a year, and has little to nothing to show for it. The states were able to educate our children better, and spend less money doing it. Moreover, if you don’t like the federal curriculum, you have little choice, where if you don’t like what your city or state is doing, if control were handed back to them, you could easily change school districts.
$47.5 billion to the Department of Housing and Urban Development which, among other things, administers the FHA. The FHA, provides loan insurance to banks on sub-prime mortgages. That is to say, the FHA exists solely to allow banks to mitigate the risk or lending money to people who don’t have the down payment and/or credit history (people who have no business adding a house to the financial mess) that banks require to offer them a loan. This lending practice is what caused the housing market bubble to pop, and, more devastatingly, caused the displacement and financial ruin of many people who were already hurting.
$42.7 billion was spent last year on the Department of Homeland Security. So much money of our federal tax dollars to pay for security guards for air ports and planes that owned by localities, municipalities, states, air lines and other non-federal interests. Even counting 9/11, you are more likely to die of lightening strike than of terrorist attack. Why is it the federal governments job to spend a lot of money doing a poor job of protecting us from unlikely event? Shouldn’t the airlines or the owner of the air port be responsible for the security? Why is this a federal issue?
I could keep listing, but I think you get the point.
So there are no inefficiency in that $355K, that could be cut? Let’s think about that as if it were a home budget. Say you were making $238K a year, you were spending $355K a year and had 1.4 million in unsecured (e.g. credit card) debt.
1. Would you be asking to have your credit card max raised? Really? isn’t that what got you into this mess?
2. Would be looking for a job that made more money first, or would you first be thinking about firing your cleaning staff, chef and chauffeur?
3. At the very least wouldn’t you stop giving money to your second cousin Lenny until you have your own mess cleaned up? ($22.5 billion in foreign aid in 2009, couldn’t find 2010 number)
I’m of the opinion that it’s important to budget, no matter what your income. Granted, budgeting is much less stressful when you know you have enough money coming in each month to cover the necessities plus a little discretionary spending, but no matter how much or how little you make it’s important to know where your money is coming from and going to.
But there definitely are two sides to the equation, which is why between my husband and I have a total of 6 income streams. I’m a full-time auditor, part-time librarian, and I have a little jewelry business. He’s a substitute teacher during the day, a stand-up comic at night, and he does some freelance writing. When all 6 income streams are providing us with money, it’s great having the extra cash to save or spend. And having money coming from all those different sources helps us hedge our bets when it comes to losing a job, since it’s highly unlikely either of us will find ourselves without any source of income.
And there IS something to be said for living simply. Or more specifically, figuring out what expenses actually bring you enjoyment versus things you pay for just because you think you should have it or because you need to keep up with the Joneses. Once you figure out the difference between needs and wants, no matter how much money you have to spend I think it’s wise to actually think about WHICH wants are going to make you feel fulfilled and which are truly just a waste of money. Conscious consumerism and all that. :-)
I go for both. My top savings rate in months past has been 80% – and yes, I still have cable (even though I don’t even watch TV – but my kids do.) But we’re not eating lentils every night either. Everyone that I know that is truly wealthy and doesn’t rely on their annual income to maintain that wealth is a saver, not just a maker.
Having said that, not wanting to focus on pinching pennies is a huge motivator for me to earn more.
Hi there! Do you distinguish between living on a budget, having a budget and budgetting? I am not sure…because if you did you will realise that you hate restrictive budget (living on a budget), ate not happy with budgets (neither am I) but that budgetting is inavoidable irrespective of how wealthy one may be.
So good for getting it off your chest – I feel the same. In fact, I would say budgets don’t rock my boat. But, my, oh my – budgetting is my thing.
Sorry, too many typos and authocorrections – started writing 12 hours ago.
“I’m sure you know the one street in the city you live. How did these people amass their wealth? Unfortunately, it wasn’t from clipping coupons or cutting things like 100 cable channels off of their television cable bill. These folks created something. They created a blog, wrote a book, invented something, started a business, or created some other profitable venture?”
While it might be true that millionaires created or started something, every year lots of people who created or started something and end up in bankruptcy court. I am sure most of the millionaires who made it, had a budget and worked within it. I wonder what your tombstone will say, “I wish I worked more” or “I wish I watched more TV.”?
I love my budget. I think that because of my budgeting skills, we have a paid for condo, a paid for car, no debt, and travel out of the country every year. My husband and I bring home $3795 every month (he contributes 25% to a 401(k), I contribute 15% and we contribute to our HSA’s ($3K annually). From the $3795 we save $1600 in taxable accounts and we each get $125 a week in allowance. We are living on $1195 per month and I attribute it all to a budget. I literally couldn’t live without one.
Bravo, Amy. That’s awesome!
I think that a lot of people are missing the point to a certain degree. Simply cutting out unnecessary items or overspending from your budget is the easy way out, and eventually you run into a brick wall where you cannot cut your budget down anymore. Increasing your income is hard. That’s why it is incredibly unpopular here on this article. In order to create wealth, most commentors are quick to point out that thanks to their budgeting skills, they spend less than they earn and pay down debts and/or invest the different. But, how much faster would you accomplish your financial goals if you increased your income as well as cut unnecessary items from your budget? Commentors such as Amy above are still only looking at one side of the equation, conquering her dreams through strict budgeting. How much better would it be if you did both budget and increase your income? Income is the answer to putting your finances over the top. A budget and cutting your budget will only get you so far.
Very thought provoking! Great job at illustrating the two sides of budgeting – not just reducing expenses, but increasing income. I personally like the cutting part more because it is much easier. It is much easier for me to get rid of a smart phone or watching tv than trying to get a job that is high income. I would rather sacrifice and do what I will enjoy for my career than try to live for the small pleasures. But, that is just me. great post.
Many of the people living in McMansions can’t afford them. They neither make enough nor budget for it. They borrow, run up credit cards, etc.
I can safely say that I do both. I have a budget and it works for me, but I’m also trying to increase my income. It is so much easier for me to control my spending habits than it is to go out there and find an income generator. I think there needs to be some balance. I cut back on the things that didn’t really add value to my life and could not help me to reach my goals. And I’m always trying to find ways to improve my income situation, but I’m not always successful. But whenever I find the right income generator, I will still use a budget!
I’m with you on the premise of the article, but can I just say you’re lamenting the fact that getting rid of cable forced you to go out and spend time with your family? Apart from the financial aspects, is that such a terrible trade-off of not watching 200 channels of TV?
It strikes me as incredibly off-mark to negatively say, “I got rid of cable and it forced me to get out of the house and go to the aquarium with my family.” Isn’t, in the long run, that money well spent?
More costly or not, I would rather take my family out to a ball game, an aquarium, or just out to walk around the town any day than sit on our @$$es all day watching cable tv.
It’s interesting the reactions to the idea of “If you want to be rich, make more money!” A lot of resistance to the idea that just a budget alone won’t do it for you unless you increase your income. It’s pretty much simple math.
Lets say for the sake of easy numbers you bring home $2,000 a month and your bare minimum expenses (housing, food, transit, clothing) takes $1000 a month. You save $1,000 a month, resulting in $12,000 a year, $120,000 over 10 years, $600,000 over 50 years. Now lets not get into investments and interest rates, lets just say that’s your steady rate of income, costs and savings and nothing changes. You will come out 50 years later with just over a half million in cash.
If you retire at 65 with that much money and expect to live 25 years past then (90), that’s $24,000 a year. If your expenses haven’t changed at this point even, that’s double what you need bare minimum to live every year. Congrats, you’ve secured your retirement, but are you likely rich? Probably not. With the income rate and savings rate you had, you probably never bought a home. You certainly don’t have a big fancy home.
Lets slide the scale out a bit. Expenses remain fixed, but lets add some extra savings every month.
If you increase your income by $500 a month and add it all to your savings rate, after 50 years you have $900,000 (just shy of a million!)
If you increase your income by $1000 a month and add it all to your savings rate, after 50 years you have $1.2 million dollars!
Budgeting is clearly the foundation of a sound financial future, but it’s not the whole story. It gets you started, but really ramping things up and getting to “rich” before retirement means you need to get your income in better shape too. You can only cut so far, but your potential to earn is far far less limited.
Mike, who puts their money in a mattress these days? Yes that would be all you had if you hid it in the wall of your house. But 1000 a month over 50 years at 6% return would give you $1,009,538. If Hank invested just $100 of his cable bill at 6% return he would have $100,954 after 50 years. Maybe 200 chanels is worth $100,954 to him, to me it would not be.
Everyone is different and needs to do what works for them. I like watching movies and I’m not ashamed of it. We use Netflix and iTunes and we don’t care for cable tv, my bf doesn’t watch sports either, he’d rather hike, work on his cars, etc. So we’re not missing anything. I can cut back to an extent, but at some point you reach a point where cutting back no longer works. You can really cut back so much. At least that’s how it is in my life.
Which is why I’m in college and majoring in finance. I went back to college in my late twenties. I don’t want to be poor in my fifties. I don’t want to be one of those older people that has to work two jobs. My parents are baby boomers that were able to retire because of good life choices.
I am 33 year old divorce mom of 2 kids and wish someone would have sat me down and taught me the importance of creating and sticking to a budget. Unfortunately it has taken me a bankruptcy, credit card debts, living paycheck to paycheck and issues with the IRS to see how important it is to create an emergency fund vs. taking trips, eating out with the family, taking vacations when I can’t afford it.
I have to say that I agree with Hank. I am 23 (will be 24 next month) and have a Bachelor’s degree (graduated May 2010). I worked 2 jobs through college, and the year afterwards, and saved most of it. Sure I went out but most times I asked myself would I rather spend money or make it? If I got called into work because someone was sick I almost always went in. Because of these sacrifices I was able to pay off my student loan of almost $20,000 only 1 year after graduating which bumped my credit score to 767 and I have $15,000 in the bank. I am taking a year off of working and am living in the Dominican Republic, granted I am not paying anything to be here but I am tutoring English on the side for $27/hour and do that 2-3 times per week so that’s pure savings. I plan to pay for my wedding in cash and have a down payment of 20% for my first house. I was able to do this by taking on an extra income and by making some sacrifices along the way but I didn’t cut out everything I liked to do. I went out to eat occasionally with friends but instead of getting an alcoholic beverage (once I turned 21) or getting a soda or another nice drink I chose the free water because I know that they overprice the drinks so much and I didn’t think it was worth it but I did indulge in it on occasion. I also used the 2 for 1 coupons in the entertainment book and split the cost with a friend. You don’t even have to get a second “job” per se, you can turn a hobby or skill of yours into another source of income such as selling jewelry that you enjoy making, doing a friend or family member’s taxes, or fixing a neighbor’s plumbing. I plan to invest in properties and rent them out in order to have more income and I might even open a restaurant or another business but it was only possible because I sacrificed a little in order to accomplish a lot.
Oh and now I’m completely debt free :) I have always paid for every car I’ve ever had in cash and no, my parents have not given me a dime of help, I actually help them out because neither one can work. No one has ever helped me out financially…
Thanks for filling in for me Mr. Hank! And for stirring up the pot a bit – nothing like a juicy blog post to get our days going :) I think both sides are very very important to overall freedom down the road, and it seems most people agree. To being happy!
@Matt – Holy crap!! That is incredible!! $52 is no joke my man.
@Tea – Unless you happen to really love McMansions purely for comfort and lifestyle ;) I don’t, but I know some people who do. I don’t think it’s always just for looks… I agree with you for the most part though :)
@Money Beagle – Love it :)
@Molly – Are you trying to turn this into a political debate?? Haha… it’s kinda funny.
@Jeremy Streich – I think you can copy and paste that comment and make a new blog post ;) It’s all interesting stuff! No matter which part you believe in or not. Thanks for taking the time to share it all with us – it couldn’t have been fast, haha… (And I agree w/ the millionaire NFL/NBA/etc players – more money DEF causes more problems for some w/out budgeting. Or at least paying someone to budget for you ;))
@retirebyforty – I don’t think you can cut expenses all the time – alot of people cut to the bare bones and still struggle. But I will agree that MOST people can still find ways to cut and save money… not as much as earning more though I don’t think.
@Jacq – Just checked out your blog — love it!! Gotta keep my eye on it ;)
@Amy – Wow! Good for you – that’s awesome! Our monthly expenses are still over $5,000 :( Though our mortgages account for most of those… stupid things.
@nickel – I like how you show up here on days I don’t write, haha… though I must admit my guest posters are much better writers than I ;) And apparently have catchier titles! Missed you at FINCON brotha.
@MikeTheRed – I think you just made Hank very very happy as that’s what he was trying to convey ;) That you can’t get rich by cutting expenses – though you can live a mighty fine life. To be financially wealthy you really need to make *more* money. Which luckily anyone has the potential to do (and you don’t necessarily have to take on extra jobs to do it if you can work your way up to a nice salar where you currently put in time).
@LaShelle King – I’m glad you have now seen the light!! Are you doing better now? All on track or still working hard? Either way we’re proud of you! :) And wish you nothing but continued success!
@Sasha – Wowwww that is awesome! Way to go Sasha!! I bet you’re gonna inspire so many people :) And at such a young age too, well done. And congrats on the engagement! When should I fly over to celebrate with you all? ;)
Thanks J Money! You can come whenever you want, lol. Only here for another year though…
I’ll get to packing! :)
You admit that your spending is $5K+ per month, and you have mortgages (as in more than one), and that there is a gap between your income and your spending, and you have the balls to be handing out financial advice? This whole article reads like a bunch of excuses to justify your unsustainable lifestyle choices.
You are living beyond your means and acting like you know how to build wealth. Which means that you are either blind enough not to see where that inevitably leads, or unwise enough to be able to see but choosing to continue anyway. How ridiculous.
Any person earning even a lower-middle-class income can spend less than they make. The proportion of families who are actually bringing in so little money that they could not possibly make ends meet through frugality is quite small. But stupidity like this convinces many that flatscreens and cable and new cars bought on credit and oversized homes and other such frivolities are actually necessities for a comfortable and happy life, diverting resources away from the actual necessities, causing rampant lifestyle inflation and deficit spending, and destroying the possibility for long-term happiness in the form of financial freedom.
Lastly, if you can’t think of anything interesting to do that doesn’t involve paying money to stare at a video screen, the problem is not a cable TV deficiency. The problem is that you are a boring person. Watching more TV isn’t going to fix that.
You may not become rich by cutting back, but you will be less stressed because you will have less bills to worry about & you will have more money to save and/or invest.