Budgeting  >  Frugal Debtor
Become a Frugal Debtor

What would you be willing to give up to become wealthy?  Dining out?  A new car? New clothes?  New gadgets?  Vacations?  Most people aren't willing to give up much of anything, not even little things like a $3 cup of coffee at a coffee house, or lunch out everyday with their co-workers. 
People are afraid of being a social outcast if they don't go out to dinner with family and friends or purchase the latest product from Apple, but they also feel that they have to live in a 3000 square foot house with a pool in the back and have two new cars in the garage because it is the American Dream to have these things.  If you don't have these things, are you a loser?

Most Americans have a disease I call "americanitis" which is defined as living beyond one's means and living one's adult life in a perpetual state of debt having little or no savings and constantly struggling just to get by for another month.  The statistics about Americans' personal finances are scary.  Way too many people are living paycheck to paycheck, taking out payday loans with exhorbitant interest rates, paying hundreds in overdraft fees to banks and hundreds to credit card companies each year.

The sad thing is that most people don't seem to understand that if they give up some stuff now, they can become much wealthier or even become millionaires later on in life.  Below is an example of how giving up little things everyday to save money can result in wealth years from now:
Mthly    Yrly
$ 16
$ 15
$ 40
$ 20
$ 40
$ 20
$ 20
$ 40
$ 40


$ 192
$ 180
$ 480
$ 240
$ 480
$ 240
$  240
$  480
$  480

Fewer visits to coffee houses
Move checking account to credit union
Bring lunch to work everyday
No vending machine snacks
Transfer high credit card balance to low-rate card
Don't buy magazines at checkout lane
Prepare meals from scratch
Dry clean less often
Cancel Premium Cable Service
Cut back on entertainment

Use to pay down debt or invest

If you had saved the $4,000 above and purchased $4,000 worth of Apple stock ten years ago when it was selling for about $12.00, you would have over $200,000 today when Apple stock is selling for about $600.  And if you had purchased that stock within a Roth IRA it would be completely tax free for your retirement.  The chart above illustrates just a fraction of what you can give up.  For example, giving up soda pop can save you over $240,000 during your lifetime.  Giving up cigarettes can save you over $200,000 during your lifetime.  Just buying the generic brands at the supermarket instead of the name brand products can save the average family of four about $32 a week (according to Consumer Reports). You can take a few thousand dollars, invest it well, and come out way ahead ten years in the future.  This is why saving money, getting out of debt and organizing your finances is one of the most important things you can do for yourself and your family.

Become a frugal person.  Stop spending your money when you don't have to spend it.  Buy used, clip coupons, stop buying things you don't need like bottled water (the biggest waste of money that there is), stop smoking, stop drinking soda pop, buy used clothing, drive your car until it is 15 years old and save, save save so you can invest and build real wealth.  Do you want to look like you are wealthy or be truly wealthy?  If you give up all the things that give you the illusion of wealth and live well below your means, you can build true wealth.  Live poor today so you can be wealthy tomorrow. 

Related Topic:  Budgeting Calculators to figure out how much you can save.
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