When I was talking about how debt is not the answer to your desires, I talked about how wanting to spend as we start earning is a natural reaction, but being mindful is what people tend to forget.
As soon as we start earning, we think our days of struggling are over and we dream of living a life of luxury. We want to buy all the things that we have always wanted but couldn’t get because it was either too expensive or didn’t make sense to our financial condition at the time.
What we need to wrap our heads around is that financial independence is a privilege. Choosing to live debt-free is a choice people don’t think they have. People either struggle with living paycheck to paycheck or bury themselves under mountains of debt, thanks to credit-cards being given away like candies.
Financial independence doesn’t come from spending, it comes from spending wisely. I could have said it comes from saving and investing, but truth be told, there is no point in earning if you can’t reap the benefits
Spending money isn’t the issue here. The problem is that people don’t understand that while EMIs, credit cards, loans, etc. are an easy option to own whatever you want without having to save up the full amount, it is also a downward slope to rolling into the debt valley.
You’ll always struggle with financial independence if your bills are almost equal to your income or even exceed it. To save more you don’t always have to earn more. Keeping your expenses low will make sure that you have a sizeable surplus that you can save.
To do so, you will need to get your priorities straight. If you are aiming to buy a car, make sure that you are an absolute need for one. Don’t go for a BMW if you can’t afford one, even if it is your dream car. Buying a car shouldn’t have you struggling to eat. Buying a car is a need, but buying an expensive car becomes a want.
Making financial goals for yourself. List out all the big purchases that you will need to make. Your monthly budget can be then made taking into account your financial goals. If you want to buy a house, then you won’t have the privilege to go out for eating, buying expensive clothes, going on extravagant holidays, etc.
To save big, you have to learn to make cuts in spending wherever it makes sense. Only then can you save the difference toward what you want. You don’t have to miss out on things just because you don’t make enough. You can buy a lot more with a low income and good money management skills than someone with a high income but poor money management skills.