There is a difference between rich and wealthy people. Rich people splurge their money on branded products while wealthy people invest their money on real estate and the stock market. Most people live a luxurious life and fail to achieve financial freedom. While most of us, including rich people, impulse buy, wealthy people stick to their buying list. Most people also pay interest charges, whereas wealthy people pay their credit card balance in full to avoid penalties. Also, most people love to gamble. Some of us are addicted to winning the lottery that if you can only sum up the money invested in gambling and lottery, you could have already bought a house. Wealthy people, meanwhile, put their money to guaranteed rewards such as stock markets, mutual funds and real estate. Likewise, wealthy people invest their time and money wisely by reading books, listening to podcasts, and attending webinars or seminars while most of us spend time and money on Netflix subscriptions.
It maybe difficult to achieve financial freedom, especially for some of us who are the family’s breadwinner or if we are already used to a certain lifestyle. But with these simple do’s and don’ts, we can start to reach our financial goals:
1. Don’t buy what you don’t need.
I admit this is the hardest rule I had to make. I tend to get excited every time I see a big red sign that says SALE. But you know what I started doing? I try to avoid malls and online shopping app unless it’s needed so that I won’t have the impulse to buy discounted items. If I can’t avoid them, I pause and ask myself multiple times if I need it or if it’s just a short-term retail therapy.
2. Don’t spend so much money on eating and going out.
I know this one is tough, too because eating and going out are social activities that are fun to do with friends. Plus, it helps build personal and professional relationships. However, it is crucial to set a monthly budget and stick to it. You need to be creative and find alternative ways to enjoy other’s company, such as visiting the museums or attending free events.
3. Do forgo convenience.
This is what I always ask myself, and you should too: Do I really need to pay for cable when I don’t watch TV? Do I need to buy a new fancy smartphone? Do I really need to buy Starbucks coffee when I can drink 3-in-1 coffee? Do I need to order delivery when I can prepare for my home-cooked meals? Do I need to take a Grab when I can use public transportation? We need to fight the initial impulse to spend and live below our means.
4. Do list your priorities.
I am guilty of this. I know I want my own house, but I tend to buy stuff I don’t need, and I tend to book a ticket, thinking that traveling is a reward to all my hard work. Since the pandemic started, I was forced to save money because I can’t travel outside the country. Little did I know that this pandemic would become an advantage to me because, in just a few months, I was able to save money and paid for a condominium down payment. This made me realize that even the small changes in our lifestyle can make a big difference.
With this recent achievement I felt extremely liberated! Finally, I was able to take control of my personal finances. For some of us, it might take time and patience, but once you change your mindset and start to transform your lifestyle, it will provide you more options for financial security.
The author is an MBA student of the Ramon V. del Rosario College of Business, De La Salle University. This article is part of her blog, a requirement of the courses, Lasallian Business Leadership, Ethics, and CSR.
The views expressed above are the author’s and do not necessarily reflect the position of De La Salle University, its faculty, and its administrators.