Whatever you earn – live within your means

Now, that is a no-brainer!

Others might even call this a “know-brainer”.

Still, I know from personal experience that this principle is not easy to apply; nevertheless, it is worth your utmost attention as it is the key to growing your savings.

People are always talking about character, but just what are the traits that constitute a good character?  Among others, I value delayed gratification (in this context) as such an essential character trait.

Because, if you spend money on luxuries now instead of building up assets, the day of financial reckoning would arrive.  In other words, if you spend money on material goods, you would end up with stuff and not with the money; and like it or not, there is no escaping this fact.

Yes, that is all good and logical, but then you wouldn’t want to be characterized as “frugal” by your friends, would you?

Unfortunately, “frugal” is a very unfashionable word nowadays; nonetheless, it is a trait that had built nations.

It is derived from the Latin “frux”, meaning fruit or virtue; and “frui”, meaning to enjoy or use well.  Therefore, frugality does not actually mean going without; instead, it means enjoying what you have! Frugality Pays off

You might want to share the real meaning of “frugal” with your friends, whenever they bring it up with a negative undertone, because “frugal” simply means having a high “joy-to-stuff-ratio”, getting the maximum enjoyment out of resources.

And who wouldn’t like that?

Thus, stop focusing so much on being a consumer; instead do focus more on being a producer.   Because we don’t own “stuff”, but “stuff” owns us!


Live by some or all of these proven workable traits:

1) Don’t do envy or greed.

2) Delay Gratification: This is a huge topic (and almost worth its own blog).  Let’s start with the Oreo-Experiment by Walter Mischel to get our head around that phenomenon.

Mischel exposed four-year-old children to a difficult dilemma: They were given a choice between a small reward (one Oreo or one marshmallow) which they could have at any time or a larger reward (two Oreos or two marshmallows) for which they had to wait 15 minutes.  Moreover, they were to remain alone in a room, facing a desk with two objects: a single cookie and a bell that the child could ring anytime, to call the experimenter and receive the one cookie.

About half the children managed the feat of waiting for 15 minutes, mainly by keeping their attention away from the tempting reward.  Check out this Youtube video for an impression.

And how the child fared in the experiment was an accurate predictor of their character traits 10-15 years later.

The resisters had significantly higher intelligence scores, better executive control in cognitive tasks, and were less likely to take drugs.

So, can you resist the Oreo?  Can you save money now and not consume it for having more money in the future?

3) Study money: If you would like to learn how money could work for you, firstly, you would have to learn how money works.  So do learn as much as you can about how money works.  A good starting point could be one of my better blog posts titled: Money, money, money …  or  Choose Wisdom or Gold?

4) Control your finances: If you don’t take control of your finances, they will control youno matter how much you earn. You will get rich by imitating the mindset of the wealthy, not by imitating their spending!

5) Borrow money only for good debts and to buy assets.

6) Pay with cash: You spend, on average, 23% more if you use credit cards. And then make use of the “denomination effect” causing people to be less likely to spend large bills than their equivalent value in small bills.

Save now to enjoy later

7) Set saving goals in writing: You have to have long-range goals to keep from being frustrated by short-range failures (which would always occur). The foundation of all future prosperity is current savingsnow and not laterso that the magic of compounding has more time to exponentially grow your savings Whenever in a buying-decision-situation do widen your narrow options-frame of ‘yes’ or ‘no’ by adding another question “What else could I buy with that money in future?” and magically your decision will drift more towards ‘no’ and alas you have more money to save.

8) Learn and apply the methods of how money can buy you happiness.  And do not fall for this trick: “Economies thrive when individuals strive, but because individuals will only strive for their own happiness, it is essential that they mistakenly believe that producing and consuming are routes to personal well-being.”

9) Close the gap between your ego and reality: For example, you require a car to commute to work (Hmm, really?  What about public transport?) so you pick one that is able to tow a boat (you don’t have a boat yet, but one never knows) and its price consumes half a year’s income.  Add in the costs for gasoline and maintenance and this is probably where you could find the most savings in your budget.  You could, on the other hand, buy an excellent economical car with excellent mileage for a reasonable price, however, these cars come entirely stripped of prestige.

10) Work hard on maintaining an appropriate long-term focus: This actually goes against our body’s natural physiological responses which are well adapted in dealing with short-term physical threats.  Our reactions are generally short-sighted, inefficient, and penny-wise and dollar-foolish.  This stress response is effective in a crisis but could be very costly if you experience each day as an emergency.  So learn to relax, focus on your long-term thinking and your short-term decision making will be improved automatically.

Now, do you have enough grit to do those things?

Or are you more like this adorable chap?

Golden retriever


“The ability to discipline yourself to delay gratification in the short term in order to enjoy greater rewards in the long term is the indispensable prerequisite for success.” — Brian Tracy

“Beware of little expenses; a small leak will sink a great ship.” — Benjamin Franklin (1787)

“I’m not real frugal or thrifty, … I just don’t waste money on little things that don’t matter, but spend on big things that do.” — Brian O’Reilly

“The foundation of all future prosperity is current savings.” — Adam Smith (1778)

“We make ourselves rich by making our wants few.” — Henry David Thoreau (1817 – 1862)

“What’s time? Leave NOW for dogs and apes! Man has forever.” – Robert Browning


Not convinced that frugality is the way to go yet?  Then read this: Mr Money Mustache or this

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