Wouldn’t it be nice to know money saving tips from some of the wealthiest people in the country?
Paul Sullivan of the New York Times thought so, too. Hence, he once spent time with 80 members of an investment club called Tiger 21 in a Manhattan Townhouse. His objective was simple. He wanted the members of Tiger 21, all of whom have a net worth of at least 10 million dollars, give a thorough critique of how he and his wife saved and spent money.
One of the most important lessons was a simple statement given by one of the members:
“The issue is not about how much we save money. Rather, it’s how we think about spending.”
What exactly does this mean? Simply put, most people think, “How much can I afford?” The wealthiest people, however, think, “What do I need to spend?”
See the difference?
In practical terms, if you see a branded sweatshirt that you really like that says 50% off, chances are you’d check the price tag. And most of the time, you’d see the $100 price crossed out and a new $50 sticker next to it.
Most people would probably think buying the sweatshirt would save you $50. But in reality, you are simply spending $50.
Keep in mind that just because you can afford something doesn’t mean you have to spend money on it right away. If you don’t need it, just don’t buy it. You’d be surprised to see just how much more money you can save by following this philosophy.
Of course, there’s nothing wrong with buying the things you want every now and then. If you feel that you performed excellently during exam week, then sure, treat yourself for a job well done. However, it’s important to avoid the habit of buying things just because you can.
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