Do you know how much the average person has in their savings account?
The statistics look bad. No, let’s just say they’re terrible.
The answer to that question is startling and stunning: about 40 percent have no savings account whatsoever. About 80 percent have about a thousand dollars or less.
So that begs the question: where is all of our money?
Look around your house, your driveway and you might get your answer. Living beyond what your means or even just at your means tends to lead to the biggest reason why we don’t save money.
We’re simply too busy spending it to think of that.
And then, you have the kind of success stories that you marvel at, the ones that are written in big bold headlines that leave you thinking “why can’t that be me?” when you hear about a couple that buys a $150,000 house with cash or a 25 year old that has managed to work a modestly paying job and save a half a million dollars and set to retire by the time he reaches 35, at the latest.
How exactly are all of these things possible?
There really is no magic theory in regard to what makes money tick for these people and why they’re so far removed from the aforementioned statistic about money saved, or lack thereof.
They simply live below their means.
Just because you make $70,000 per year doesn’t mean you should spend $80,000 on your expenses or even butt up against that 70K mark. The truth is those who have money saved and don’t worry about money are able to save it because they’ll take a $70,000 year paying job and live off $30,000 of it quite comfortably because they make decisions that allow them to work, have a car, house and other amenities but focusing primarily on having money leftover as the most important piece to that puzzle.
How do they do it?
Simple. They don’t buy used or pay full price. They’ll take a $15,000 vehicle instead of buying a new one for $40,000. They are approved for a home at $250,000 and instead buy one for a third of that price and have a mortgage that allows them to do two things: have money leftover and add to the home through renovations with money that comes out of their own pocket versus expensive loans.
For most, we equate spending to happiness and that just isn’t the case. Those types of purchases, services or items that you don’t need don’t create the kind of smile you’d have it you went without those and instead had the peace of mind that your money is exactly where you want it to be: saved.