It takes sacrifice and discipline

Good day to you all.

Today I would like to respond to a comment received from my last post from Jim,
it read as follows:

Hi Namsu,

I dont know about what your sayin here it seems a kinda cut and dry to you. It seems your life msut be kinda simple. I got bills to pay and mouths to feed and there aint really much room for cutting back any more. I understand you say to be positive but its kinda hard to be positive when you have to to buy a tonne of stuff you cant afford.

I´ll keep reading and see if you got anything bright tosay.

Jim

Okay, I´ll admit, I don´t have kids to look after or huge financial commitments. However, there will always be something that we think is holding us back and preventing us from saving. We all need somewhere to live and something to eat. But, most of us have the choice of WHERE and HOW we live and WHAT and HOW we eat. What I mean by this is. You could choose to rent or buy a bigger house in a nicer part of town or you could settle for a smaller place in the sticks. Just as you may choose to eat out every night or you could shop home brand and cook at home.
This brings us to the topic of today.

In fact, I do think the plain facts are pretty cut and dry. The problem is that many people aren´t willing to make the sacrifices and lack the self-discipline to reach their goals. They lack the foresight to realise that their current situation could be temporary if they would stick to their guns and take control of their lives. THERE IS NO SUCCESS WITHOUT SACRIFICE.

Try this exercise. Think of some areas in your life where you may have weaknesses and find yourself spending more than necessary. For example, particular brands of foodstuff, makeup and hair products or alcohol. Make a list of as many of these that you can think of. Now, depending on your dedication to your goal list which of these you could substitute for a cheaper brand (particularly, beauty products most of them have exactly the same ingredients), or cut down or cut out completely. Now for motivation, quickly calculate how much you would save in a month if you put these steps into action. You may be surprised or even a little sickened by the result.

To put this theory into practice, I´ll describe briefly a chapter from my own life how this strategy got me onto the right path. When I was in my early twenties I went abroad, as many folks do, to live in London. I found an easy gardening job and I lived in a relatively cheap share house with six others. I drew up a budget of how much I planned to save and how much I would have when I left. Okay, this was a good start but like many good plans life gets in the way. I would make some progress in saving but then one big drunken weekend would wipe it all out. Although I did save a proportion of my wage it was nowhere near what I had planned and I squandered it.

This is because at that time my mindset was not geared to wealth acquisition. My mentality was, that I only had a set amount of time to earn a set amount of cash. My budgets were way too restrictive and I didn´t have the self-discipline to control my partying.

More recently, while travelling from Spain, I stopped in London again. I picked up the same job as before. However, this time I didn´t want to share a flat. I found a small (and I mean small) self contained flat in W2. I wasn´t earning much more than before and I still liked to budget but I had learned from previous mistakes. I had learned to make sacrifices in some parts of my life that would subsequently give me more control in other parts.

As a result, this time round I was living more comfortably and saving more than before. I still had a budget and savings goals but these were flexible to some degree. If I did decide to spend a bit extra one weekend on the town, I wouldn´t beat myself up over it. I would find other areas where I could make up the difference. For example an extra day of overtime or putting off a planned purchase.

The point is that until you really change your mindset and take control of your actions you will be fighting an uphill battle. If you find you are spending too much in certain areas, you have to ask yourself why and think how you could improve your situation if you made changes. Now I´ll suggest some strategies to help change your thinking and get you on a savings path.


1. Know and own your weakness: What I mean here is that if you can identify the problem you can rectify it. If you find you spend money when you are bored, ie you go to the shopping centre buy some shoes and have lunch, then find something positive to substitute that action. For me it´s exercises. Some people cringe at the thought, but go for a half hour run and you won´t be bored and you´ll have all these little endorphins running round your body making you feel great and thus stopping cravings. If you can´t run or it´s impractical, phone a friend watch a comedy (laughter also releases feel good endorphins.

2. Pay yourself first: You work hard for your money, so before you hand it to anyone else make sure you give yourself some first. I mentioned compound interest in an earlier posting. Pay yourself a percentage of your wage into this account and don´t think of it as cash at hand. This if for you and your own long-term security. I hear some of you say,´but I don´t have a percentage of my wage to spare!´. Well to that I say, ´pish posh´. Find it! Be creative! Find some areas of your life,as mentioned above, where you can redirect cash. or try the next step.

3. Make more money: It´s out there. If you are proactive you can find it. If you are running a business maybe you can offer other services for more revenue. Are you offering a really good service? Increase your charge rates. There are a myriad of ways to make some more money, just don´t spend money to them (not now anyway, we´ll do that later). Use anything you may have at hand or skills and talents that others may find value in. If you are on a set wage, have you considered asking for a raise? Draw up a list of your responsibilities and what you have done since joining your employer. If you have added real value to the business don´t be afraid to ask for what you´re worth. The worst they can say is no.

4. Focus on attaining Wealth-building Assets not liabilities: As I have said before, the key to getting anywhere with money is to have your money working for you and not the other way around. Things like televisions and jet skis are not assets. They depreciate in value and will ultimately cost you money. However, some liabilities are necessary as they can be used to create income, like your vehicle, computer or phone. Try to increase your total assets as much and as quickly as possible.

Finally, to wrap this up for today.
I want to say, it´s up to you to what extent you employ these savings techniques in your life. Only you can priorities your values. I am not suggesting for one moment that to be successful you have to live in a rat invested apartment with 20 students and eat baked beans everyday.
I´m simply stating that if you want to improve your current situation you must be disciplined and make some sort of sacrifice. Be that time in the pursuit of earning more (working some overtime on the weekend), favourite products or luxuries or simply opting to walk to work instead of driving. Also, I need to say that these strategies are largely pitched at people who feel they may have been left at the starting line in life and need to catch up. I don´t think life is a competition, but the reality is, we all only have a certain amount of time on this earth, so we must enjoy it, but with some pretty (really, let´s admit it) painless sacrifices and exercising a degree of self-control in your lives we could greatly improve the enjoyment of our future lives.

until next time

Park Namsu