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What image comes to mind when you see these words?
Scrooge. Penny Pincher. Cheapskate. Miser.
I picture an old man, his face distorted by a scowl and his clothes worn thin, sitting alone in his living room. He’s probably featured on an episode of Hoarders: Buried Alive.
Fear rules his heart and his mind, keeping him from truly experiencing any joy in life.
Not a pretty picture, is it? No, but it’s also not an entirely realistic picture either.
Certainly there are greedy, selfish types of individuals who fit the proverbial miser, but not everyone who watches their spending fits this profile. I’d go so far as to say that most individuals watching their pennies are generous with both their time and their money – they’re just smart enough to know how to efficiently manage both.
These individuals are savvy budgeters; investing for their future while still enjoying their day to day lives.
Are you a penny pincher?
Would you still be one if your income were to double or triple overnight?
There’s a lot to be learned from wealthy individuals who practice frugality. They’ve achieved ‘success’ financially yet still continue to watch their spending.
Here’s what they do:
1. They manage their finances well
The core of a good money management system has to involve some kind of budgeting and wealthy individuals who are frugal with their finances have created a balance between expenditures and savings that works well for them.
2. They base their decisions on long-term goals, not short term pleasures
Is the ability to delay gratification an inborn trait or is it learned?
In 1972 researchers published their study “Cognitive and attentional mechanisms in delay of gratification” (dubbed The Marshmallow Study) wherein they linked the ability to delay gratification in the children studied with success later in life.
What makes the results of the study even more interesting, however, is what researchers at the University of Rochester later determined when they tried to replicate the original study.
They determined that when the children had unreliable experiences (i.e. the researcher didn’t do what he promised he would do) they were unable to delay gratification.
Other children, who had reliable experiences, were able to wait for the promised item. They learned both that it was worth the wait and that they had the ability to wait.
So what do these results suggest?
The ability to wait is not a predetermined trait, but is impacted by environment and experience.
3. They still have fun, but they save for it… without going into debt
Wealthy penny pinchers budget money each month to meet both their current and future needs and wants, both the expected and unexpected.
For example, rather than go in debt for their holidays, they put money aside every month so that when the day arrives they can pay cash and come back home with no debt.
4. They always look for ways to fine tune their budget
Not content with the status quo, savvy savers study their expenditures to see where they can cut costs and set aside more money.
Also, as discretionary spending can quickly get out of hand, money smart individuals pay close attention to the small things, which can add up surprisingly fast.
Put simply, wealthy individuals who practice frugality pay attention to their finances and make money management and goal setting a part of their regular schedule.
5. They “fill the gap”.
There’s always going to be a gap in knowledge or resources between where you are now and where you want to be. At Positive Real Estate, we help investors fill that gap by coaching them to fine-tune their goal setting and money management skills to enable them to achieve financial freedom.
If you’re tired of living pay-check to pay-check with little saved towards your financial future, both in retirement and right here and now, we can help.
Sometimes all it takes is another set of eyes on our situation to help us find what’s stopping us from succeeding. That’s why I’m extending an invitation to attend our next Property Investor Night.
No pressure, no sales tactics, just information you need.
Not only will you learn details about where the markets are right now, you’ll also learn actionable strategies you can use to secure the best possible outcome for your particular situation.
And did I mention that this event is FREE?
Our mission is to help Australians achieve financial freedom through property investing.
That’s why we educate our clients on more than just where to find a good investment property. Good goal setting, budgeting and finance skills are a part of every successful investor’s toolbox.
We want to help put those tools into your hands.
Ready to come along?
Register your details below, but don’t wait. Seats fill up fast, so book yours now!