I try to keep my blog postings concise and to the point but, this topic is so powerful… I had to share the whole shabang! Thanks in advance for being patient with me! = ) For your patience, please accept a FREE audio book at the end on my post… it will open you eyes to the world of the TRUE millionaire mindset!
There are tons and tons of conversations out here in cyberspace… urging people to get rich quick and make tons of money now! From flashy car shots and rain clouds of money showering down over the heads of “Money Making Guru’s”… the message is prolific… “MAKE TONS OF MONEY AND DO WHAT YOU WANT WHEN YOU WANT & SPENDING ALL THAT YOU WANT!!”
This mental image portrays an image of… once you start making ton’s of money, it never ends. In other words, there’s a level of complacency that “I HAVE ARRIVED AND I’M GOOD TO GO FOOREVER!”
However, aside from the wealth building messages that many of us diligently pursue, we tend to overlook one underlying principle of the wealthy, which is actually the total opposite of what we see… it is about the retention of your hard earned money!
That message simply conveys a need to “PRACTICE FRUGALITY” as opposed to spending every single penny on luxury items!!
Now I know this may not be the most searched topic on Google, but guess what? If you want to make Mailbox Money and KEEP IT… then you MUST read this post!!
So Listen Up!!
Last year, I admit, I made a great deal of money and yes, it feels good to say that! But, I was running so much and moving so fast that I spent an awful lot of money too. You see, IMHO (In my humble opinion), Money isn’t hard to make….. but the true secret lies in how much you keep!
You have an indulgence of advertisements begging for your money, along with the message from the masses suggesting you should drive expensive cars, live in supersized & lavish homes and wear name brand clothes that can often cost as much as a car payment for one article of clothing.
As I slow down with the intent to be conscious of my earnings and my business, I’ve begun to pay close attention to my spending habits. I am looking more in depth at the monthly output of cash that is going out, versus the amount of income that is coming in.
Why am I doing this you ask?
Well, let’s think about this for a minute!
How many times have you read headline stories about professional athletes who earned in upwards of $100 Million Dollars over the course of their careers, but go bankrupt a few short years later, with nothing to show for their financial success?
How many times have you heard of a successful Network Marketers who were making 5 figures per month in their company but, ended up being faced with the company closing its doors or snatching their downlines away from them due to some change and shift in the industry?
What about lottery winners that took millions of dollars in a gigantic lump sum payment? What about music stars or entertainers… the list goes on!
My point exactly!!
The issue isn’t about “Money”… it’s about “Mindset”!!
I started my own business at the age of 12, making as much as $500 per week selling stuff, babysitting, delivering newspapers & running errands for neighbors… so money has NEVER been an issue for me. However, the downfall was the adoption of thinking that “money truly does grow on trees, and when it’s all gone, I’ll just go pluck some more off of the tree”.
With my spoiled habits, came poor money management. I remember getting my first checking account my freshman year in college. I was only 18 years old and I was so happy to be “grown”, racing to the bank to open up a checking account. In my eyes, this was simply an extension of the money tree. Write whatever you want on these pieces of paper and no problem right???
I ended up bouncing checks for as low as 17 cents… Yes, I said it, 17 freaking cents short in my account. I remember as clear as day because I remember freaking out when I was hit with that $28 fee for 17 Freaking cents… seriously?!?! I thought, “how can I be out of money when I still have checks left?’
For years, the journey to become “realistic” about money would share its degree of challenges. Learning how to pay my own bills was a challenge and I grew very frustrated about Money Matters. Almost to the point of avoiding it because it was hard work for me to understand what was a need versus what was a want…. and I’m being honest about that.
I’d grown up my whole life never accepting “no” for an answer. And with the amount of money I started earning at an early age, there wasn’t anything that I couldn’t have.
However, as an adult, “excess money” wasn’t so easy. There was rent, the phone bill, car note, and let’s not forget toilet tissue and toothpaste. It’s crazy when you grow up in a home that had all the luxuries of life, and you never once paid attention to the price tag of anything. At least I never did.
I couldn’t believe how much a trip to Target would cost me…. just for a few toiletries, sheeshhh! My level of awareness began to grow and my ability to decipher between need andwant would eventually improve.
Fast forward to today! I can say that the spoiled child still lives within me but, he is more under control. There’s still those moments of , “I deserve this so I’m going to buy it”, when I talk myself into purchasing those “wants”. I still love my fancy Mercedes, SUV and Prius! Does a grown man really need 3 cars though? Why do I need so many designer watches or custom tailored suits for every single day of the month? But, as I continue to learn about wealth, money management and becoming more responsible… there’s a nagging urge in me to become more FRUGAL!!
It’s so funny but as I wrote out this year’s New Year’s Resolutions, one of my personal goals was: “TO BECOME MORE FRUGAL AND CHEAP!”
I have to laugh as I think back on it now but, I am dead serious about this. The reason why I’ve adopted this mindset is because I’ve come to realize that I love business, sales and anything else that has to do with getting a business from start-up to massive success… but, I don’t want to be working that hard much longer.
Instead of constantly “WORKING FOR MONEY”, I desire to mature into a wise investor that allows “MONEY TO WORK FOR ME”.
With this desire comes shrewd money management, and the ability to hold out on instant gratification in exchange for long term planning.
You see, people bask in the short-term successes of others and often say “Wow Nathan, you’ve done very well for yourself, my goal is to accomplish what you have done!” But if the truth be told, money comes in cycles and yes, I’ve had great years, but I’ve also had shockingly challenging years to follow those record breaking years. Can you say wake-up call?
There’s nothing like having a year where money wasn’t an issue, and dining out at Ruth Chris is just as frequently as some eat at McDonald’s. Then to having a following year where paying bills is like pinching pennies – it opens your eyes and gives you a different perspective on the value of money.
I’ve been there before and it’s no fun… not to mention, very embarrassing!
So the true measurement of success is not based on “HOW GREAT THINGS ARE WHEN ALL IS WELL” but ……“HOW ARE THINGS FOR YOU FINANCIALLY WHEN YOU CHOOSE TO SLOW DOWN?”
We can all get it while the getting is good, but when things shift… are you financially prepared to sustain your lifestyle until things turn around again?
That’s the true question!
So in essence, my point is to share some things that I’ve learned and begun to implement into my personal life and in business! I think all of this can apply to just about everyone… whether you’re making ton’s of money or not!
1. Watch every dollar coming in and every penny going out! – I’ve never been a fan of “budgets”. I actually found them to be very time consuming, hard to manage and useless for the type “A” personality type like myself, BEFORE I realized how important this concept was.
Now, I actually keep a ledger on my computer and record every purchase I’ve made and every check that I’ve earned, establishing a budget per category to gauge my purchases and expenses. This better helps me to know when it’s time to limit spending in a certain area like Internet marketing products (which tends to be my big weakness).
2. Clipping Coupons – I’m not sure if you recently saw the show “Extreme Couponing” on TLC but I was totally shocked at the amount of money people save using coupons. Actually, there’s a whole society of people out there who practically grocery shop for FREE, and have ton’s and ton’s of groceries stored up to last them through an Armageddon!
I’ve always thrown coupons away and bought whatever I wanted out of the grocery store, never looking at the price. And as a certified snacker, I buy all kinds of stuff, and waste tons of food too! Or shall I say “I did”….
No more…. Now, I write out a menu for the week, go to the grocery store only once or twice per week, write a list before I grocery shop, clip coupons and try to keep my groceries and toiletries under $150 per week. That was a challenge for me at first but, when I saw the savings… I quickly got over it! = )
I’ve also begun implementing the house rule that I will not cook more food until I finish most of the leftovers in the fridge. It doesn’t always work, but it’s rubbing off slowly but surely!
My ultimate goal is to get my weekly grocery bill under $50-$75 per week as I learn to master the art of couponing. I’m also ambitiously pursuing the goal of going to the grocery store one day and getting a basket full of groceries – all to coupon my way to a final cost of $20…. It’s possible, trust me, TLC showed us that!
3. Cut back on every day expenses! – This was huge for me this year (2011) as I made a decision to monitor all of my household expenses like groceries, cable bill, cell phone bills and eating out, entertainment, etc.
I have been combing through every single bill and bank account that I have and I’ve saved hundreds of dollars already. Check out how I did it:
A. Cable Bill– I wanted to see how much I was actually paying monthly for the cable bill and what I used vs. what I wasn’t using. I was able to cut quite a few expenses from the cable bill, shaving the movie channels off of my bill (Showtime, HBO, Cinemax) as well as the cable box that I was paying an extra $8.50 for… In the end, I got my bill down by roughly $55 per month!
B. Internet Bill– I had previously ordered the top notch service offered due to multiple challenges I had with my internetservice while hosting live webinars. However, I’verecently downsized as I discovered other tools that I needed to use during live trainings, which allowed me to downsize the cost. Thank you MyVideoTalk! This added an additional $25 per month in savings, which is huge when looking at Internet bills.
C. Cell Phone Bill – I currently have AT&T and I use 2 Blackberry phones. This costs me $30 each for data plans, and I (had) unlimited usage with my phones as well as my text plans. After assessing past bills and paying attention to our actual phone usage as well as our text plans, I realized that we could actually reduce our plans to the “minute” plan, getting 2400 minutes combined per month.
Considering that I have a house phone andI’m home most of the time, I figured, I use the minutes the most, so I can use my home phone to keep the minutes down as opposed to keeping the unlimited plan. I also found out that I can pay for text packages by the number of text messages I used per month. I’m a pretty high texter so I kept the unlimited plan for text messages, but all in all, my phone bill was reduced by about $65 after making these changes! I heard of a company called Simple Mobile and I believe they have an unlimited plan with data for only $60 a month. If you have them as YOUR carrier, let me know your level of satisfaction. I’d switch in a heartbeat!
D. House Phone Bill – I was using Verizon for home service, but for me to rarely use the home phone, the bill would be as high as $75 per month for nothing. So I switched (just like the commercials) to an Internet based Iris Video Phonethrough ACN. It allows me unlimited local & long distance calls through my internet service. This has saved me an additional $50.
4. Eating Out– this was a huge expense for me as I’m was always “on the go”. Now, I try to pack snacks and lunches when I leave the house, andif I do eat out, I usually get a snack versus a full meal to hold me over until I get home. Now when I grocery shop, I try to buy things that I usually crave, that way… I can kill the desire to pick up a high priced Starbucks Mocha Frappucino, and instead… I’ll get the Cream mate Caramel Flavored Creamer to drink with my coffee, and this will help curb my need to visit Starbucks!
5. Watching my bank statements closely – I monitor my online charges at least 3-4 times per week. You’ll be surprised how many errors show up on your statements, pulling money out of your account for no reason.
I recently found a charge on my business bank account for $72.11 from Avis Rental Car. I had rented a car for 10 days when I flew down to Florida but, I had prepaid for the car at a flat rate.
The morning that I flew out to return home to Washington, DC, I stopped to fill up the tank to ensure I wouldn’t get charged any additional fees for gas (which they were charging $13.99 per gallon if you didn’t fill it up!). Can you say highway robbery? Anyway, I realized I needed gas at the last minute and ended up missing my flight because of my last minute stop at the gas station. I brushed it off and had to wait 4 hours until the next flight! No worries… it was Miami for goodness sake and an extra 4 hours in 80 degree weather is not torture… especially since it was 28 degrees back home!
When I called Avis regarding the charge, they told me that it was due to me returning the car with only half a tank of gas. Considering that I dropped the car off at 5am, no one was there to check me in so I had to leave the car and the keys in the garage and hope that they would get everything accurate.
When the rep told me that the $72.11 charge was on there because I didn’t fill the tank, I went ballistic. I let her know that I missed my flight behind filing the tank and was asked to fax in a copy of the bank statements showing proof of the purchase of gas! I immediately sent in the statements and my $72.11 was returned.
The moral to the story, keep track of your expenses and monitor your bank statements very closely!
6. Internet Marketing Tools – Now this is obviously a sensitive area for me as I practically live online. But when I assessed the amount of money I spent on a monthly basis, I found that my business overhead (including outsourcing and all) ran me nearly $2,000. That’s someone’s household expenses, so I had to definitely shave this back a bit.
I jotted down everything I was paying for on a monthly basis that was being debited out of my account monthly. My list consisted of the following (this is just a portion of my list)
- Aweber ($69.00)
- Icontact ($19.00)
- Vid Hosting ($40.00)
- Survey Monkey ($19.00)
- Izigg Mobile Mkt ($49.95)
- Ring Central ($39.95)
- BYO Audio ($19.00)
- HostGator ($9.95)
- Elevation Group ($67.00)
- Go To Webinar ($99)
- Ning Site ($19.99)
- 2ndNing Site ($2.99)
- Meetup Group ($30.00)
- My Video Talk ($100.00)
- ACN ($30.00)
- Blogging add-ons& syndication tribes (80.00)
- MLSP (49.00)
And this is just what I can think of off the top of my head. This doesn’t include my monthly outsourcing rates as well as all the products and things that I buy on a monthly basis. And I admit, I buy tons of products and learning programs monthly.
Bottom line was, I had to assess what I was spending and begin to eliminate those tools that I wasn’t really using as often but was getting monthly drafts for. In the end, after establishing a flat monthly budget for my outsourcing needs, and tools I needed to buy, I shaved off nearly $1,000 off of my monthly business expenses and that is HUGE! A savings of nearly half!!!
Being that I’ve slowed down a bit, I’m finding that with my new business planning program, I’m able to make time to learn things that I will need to know to get different tasks that I normally outsource, accomplished a lot faster. I also focus more on doing Income Generating Activities (IGA’s).
I will be doing an additional training, showing you how you can do the same in my upcoming Business Planning Trainings, so stay tuned!
As you can see, being more frugal and aware of your monthly expenses can be just as important as finding new and creative ways to make more money. Just by monitoring my expenses from the examples listed above, I was able to shave my overhead down by crazy amounts each month! That’s not including other areas that I’ve cut back on which I didn’t mention in this article.
Another unspoken tool to wealth building is frugality… the art of learning how to keep more money in your pocket than being spent. So in all your pursuits, be sure to pursue knowledge of money management and frugality. In the famous words of Dave Ramsey, when you learn how to budget and save, you will begin to “live” life in abundance.” I know it seems like it is a contradiction but, it is absolutely true!
To avoid being the poor getting poorer, take charge of your finances. Learn to manage what you have and you will unveil the mindset that is prepared for wealth. Remember, it’s not what you make, but it’s learning how to keep more of what you make that really matters! I have been blessed with wealth due to HARD WORK and could care less if gas goes up to $8 a gallon… but, saving on the basics helps me retain more of what I do earn.
It’s not about the MONEY, it’s all about the MINDSET!!
To learn more about the REAL millionaire minset, please allow me to offer you “The Millionaire Next Door” as an audio download. Enjoy and be sure to come back for additional free offers from me! = )
To your success, wealth & you being a cheapskate in 2011…
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