Saturday, January 26, 2013

Jumping off the Treadmill of Materialism

 When I was younger, I got caught up with materialism like many other people.  The goal was to have the bigger house, the nicer furniture and clothes, etc.  There was one thing that happened that was a turning point for me.  I went to a meeting one night where a couple spoke about how they retired early. Before that time, I had the mindset that many others did namely that you worked until you retired.  I had never really thought about retiring early and having the freedom to pursue things that I wanted to do.  As I listened to them talk about the sacrifices they had to make, it was amazing to me that those things could make such a difference.  Here was this couple who were able to full time religious service to others because they had been frugal earlier in their lives.  Ever since then, I have had the goal of financial freedom.  We have made some of the similar sacrifices that they have, but it is easier to do that when you have a goal in mind.  There are several things you can do in your life to make a difference. 

1.      Drive your car until it dies.  The wife of the couple who retired early told us how she felt a little uncomfortable driving a very old car when her friends were driving new cars.  Her husband kept telling her that if they lived like that for 10 years, it would pay off.  Now that the 10 years were over, she said that it has really paid off.  Liz Weston wrote an article called, “Your Car Is Wrecking Your Retirement”.  She says that if you were to invest the $8.000 that you would pay each year for a car and expenses related to it, you could save over a million dollars over 40 years.  Before you go buying a new car, think about driving the old one a bit longer.  Another suggestion from the couple who retired early was to always pay cash for cars.  You save a lot of money in interest if you do this.  Dave Ramsey made a video about this very subject called, “Drive Free, Retire Rich.”  Driving a nice car is great, but is it really worth the trade off?
2.     Pay off the house you have and stay where you are.  Warren Buffett has done this and he certainly has the money to buy a very nice home if he wanted to.  If you have a home that you can’t pay off by the time you are 50-55, then consider downsizing.  If you are in a home that isn’t your dream home, stay put. Get your mortgage paid off.  By having your home paid off, you will have a lot of financial freedom. 
3.     Save Money.  Dave Ramsey has another video that talks about saving $100 a month from the time you are age 30 to age 70 invested wisely could make you a millionaire.  Most people waste one hundred dollars in a month.  Before purchasing something, take some time and think about it.  Ben Franklin said “At a great pennyworth pause a while.”  Before buying something new, ask yourself if you have something already that will work.  For example, who needs an apple cutter when they have a knife that will do just fine?  Look in your closet and see if you have an outfit that will work for the occasion before purchasing something new.  The little bits that you save will make a difference. 
4.     Plan your spending and stick to your plan.  A budget is nothing more than a plan.  Some people look at it as something that is restrictive, but a following a budget plan will help you to have the freedom you want in the future.  You know you always have money for what you need because you have worked through the plan ahead of time. 
5.     There are a few other simple things to do:  take care of what you have, buy used if you can, cook your own meals from scratch, don’t waste. 

We can get by with much less than we think we can.  If we focus on our needs and follow the 5 suggestions above, we could be like the couple who shared their experience of retiring early.  They have the freedom that most people won’t have because they have been careful.  If financial freedom is a value to you, skip keeping up with the Joneses and focus on keeping up with your plan.  I will always be grateful for this couple who shared their experience with me that night years ago.  Their counsel has benefited my family, and we also hope to have the chance to retire early one day.

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