Want to know the secret to financial success? Be born into wealth. Ok, well, that’s one of them.
But another really valuable lesson that applies to everyone no matter whether they inherited a windfall or found themselves alone and broke at 18 is to live below your means. It is so tempting when you start making money to upgrade your life, and even those who make a ton of money fall into this trap.
It’s a simple equation. Take the money you earn, don’t spend it all, put the difference in savings. Repeat paycheck after paycheck and you’ll find yourself with a slush fund that can cover some big expenses as you move forward.
Is this foolproof? No. Can life throw a major wrench in the plan? Yes. But for most people in most situations it works. So, don’t buy that new outfit, don’t go to the more expensive hairdresser, don’t rent the bigger apartment, and definitely don’t drive the nicest car until it isn’t a stretch at all to buy it. Let your bank account be the mountain, and not the reflection, so it stays above water!