As a self-proclaimed personal finance enthusiast, people frequently ask me for tips on how to combat debt and pump up anemic bank accounts.
You can strip down my top wealth building secrets to two rules: 1) Stop spending money, and 2) Live lean.
Let me break down my first point into an easy-to-follow, if-then argument. IF you earn money and exercise the fiscal discipline to not buy stuff, THEN your net worth will increase.
Of course, you’re still on the hook for basic necessities. But by sticking to this simple advice, many people can turn their financial situation around overnight.
My second point is a bit more nuanced. Too often, we shackle our earnings to contracts that choke off our ability to amass a fortune. Which brings me to one of the worst offenders to your wallet . . . housing.
Where’d this notion come from that human beings “need” ever growing quantities of space? I know we’ve gotten fatter over the years, but not that much fatter (I hope).
At an early age, my mother taught me—perhaps unintentionally—that, given the opportunity, an undisciplined person will fill a container to its capacity.
More than once, my mother duped me into believing she’d bolt in and out of the supermarket for bananas.
As soon as my mom reached for a shopping cart, I knew we’d linger in that horrible place long enough to grab bananas and lettuce and pork chops and aluminum foil and whatever other random item my mother set her sights on.
That’s what I think we do with our living quarters.
Recently, Michael Bloomberg, Mayor of New York, challenged developers to design a 300 square feet, apartment dwelling for the city’s growing population of single, childless inhabitants.
A friend asked me if I could live in a space that small. Well, my current apartment is more than twice the size of one of the proposed “micro-units.” Soooo, yeah.
If downsizing to an apartment that rivaled the size of a luxury doggie hotel afforded me the chance to live in one of the world’s most exciting, culturally interesting cities, then I’d hock half my wares and hunker down in a freakishly tiny, yet fabulous, place.
But even if you opt to live in the ‘burbs, you’re not forced to live in a monstrous size house.
Here’s the quick and dirty guide to making the most of the space you have.
Stop buying stuff.
As I indicated before, you don’t need more room, you need less stuff.
Get rid of stuff.
Don’t waste money organizing and housing junk.
Trash it, donate it, sell it, recycle it, or–dare I even suggest–use it. Consider getting rid of any item you haven’t used within in the last twelve or more months.
I know it’s every packrat’s nightmare to need a product—at any time during the coming decades—that they tossed out during a purging session, but don’t fret. If you realize you truly do need a bread machine, buy one with the money you saved by forgoing a larger home.
If you cluttered your home with tons and tons of crap that you can’t mentally or emotionally bring yourself to prepare for donation, throw it out.
Vertically organize your remaining stuff.
Shelves and clear shoe boxes were a godsend for us noncreative types.
The trick to maximizing your existing space involves arranging your items in such a fashion they go up to the ceiling and down to the floor, instead of out from the wall.
What do you think? Would you live in an abnormally small space to save money?