Work gives us a sense of purpose, but people who are stuck at jobs they don’t like won’t feel much enjoyment from their work. If you don’t enjoy your career, you can get out by developing skills and looking for better opportunities.
However, the way you manage money also plays a key role in your ability to get out of the rat race. Financial guru Vincent Chan recently laid out the blueprint and explained how people can pursue freedom frugality to give themselves more decisions. If you’re not frugal, you risk spending more money and putting yourself into a deeper hole.
“Making money means nothing if you just spend more money,” Chan explained.
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Here’s how you can use freedom frugality to build wealth and give yourself more choices without being a penny pincher.
Frugal Vs. Cheap
Chan doesn’t waste much time before breaking down the difference between frugal living and cheap living. Being cheap means only caring about the price of a product or service. Then, cheap people cut corners whenever they can. Chan compares it to buying a $25 pair of boots that will only last a few months. You will eventually need new boots, but that doesn’t matter at the moment for a cheap person.
A frugal person cares about value. These people aren’t afraid to spend $200 on a pair of boots that will last for several years. Frugal people aren’t afraid to spend money on things that matter to them. They appreciate valuable items and experiences that will do far more than just collect dust in the corner of your room.
Some cheap people become millionaires, but then they only end up with fat bank accounts. Some high-net-worth people feel like they missed out on life by relentlessly focusing on their careers over relationships and experiences. It’s good to save money and be financially responsible, but make sure you’re also spending money on things that you enjoy.
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Become Hyper Aware Of Yourself
Chan recommends becoming hyper aware of yourself and what you enjoy. That way, you can get clear on the things and activities you want to spend money on. It’s fine to spend money on those things if you can afford it, but knowing what you enjoy also gives you the flexibility to ruthlessly cut costs on things that don’t matter.
Identifying what you care about and what kind of life you want to live can help you decide which expenses to keep and which ones to cut. You can also review your recent credit card and bank account statements to ensure your money is going to the right types of purchases.
Giving yourself permission to spend money on certain things doesn’t give you permission to splurge all of your money. It’s still important to invest money and remain financially disciplined. Doing those two things will give you more financial flexibility in the future and give you more choices in life.
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Reframe The Way You Look At Budgeting
Budgeting isn’t a pleasure for most people. The common conception around budgeting is that it’s filled with restrictions about how you use your money. Most people don’t find it fun to review their income and determine which expenses they can’t put on their credit cards.
However, Chan encourages people to reframe the way they look at budgeting. Instead of viewing it as a limitation on how you spend money, you can view a budget as a tool that lets you say yes to things without feeling anxious or guilty. Budgets give you guilt-free permission to spend a certain amount of money after you have covered your living expenses and made valuable investments toward your future.
Chan extended this idea to social activities. It’s common for people to blow their budgets during social events, especially since people don’t want to feel left out. You can say that you still want to hang out but are saving money for something important and want to do something cheaper. This strategy lets you stay within your budget while having fun with friends.
Chan also said that some of your friends may also be saving for a big goal and be grateful for an alternative. However, if someone makes fun of you or gives you a problem about wanting to save money for a long-term goal, you may want to re-evaluate that friendship.
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This article Vincent Chan’s Blueprint To Freedom Frugality Can Get You Out Of The Rat Race: ‘Making Money Means Nothing If You Just Spend More Money’ originally appeared on Benzinga.com
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