Getting your expenses under control can seem a bit intimidating at first. But like any journey of a thousand miles, the key lies in focusing on the process one step at a time. We have already discussed how finding comparable products and services as well as not always buying brand new items can help your money to go further each month. But an even greater control over your finances can be achieved by asking yourself: “Do I really need this right now?”
There can be no denying it: we have to spend money to live. However, it is not only how we spend it but also when we spend it that can make a difference. Let’s look at an example.
A farmer plants an orange tree to share with his family and to provide some cash when he sells the extra oranges at the market each year. Now let’s say that the farmer wants to buy a new tool to use around the farm. Where should the money come from? An impatient farmer might cut down the tree and sell the wood to get the tool, whereas a patient farmer will wait until he gets the money from the oranges and then he will buy the tool with that. At the end of the day, he will have both the tool and the tree.
Ask yourself: “What kind of farmer am I?” When you earn money from your job, that money is like a fruit-bearing tree. You can wait and let that money make you more money, or you can spend it right away. When you spend your money right away instead of investing it first, you shortchange yourself. How so? By being like the patient farmer, you could have invested that money into a cash producing asset that would give you the cash to buy what you want and then would keep producing cash long afterwards.
Investing our money in assets and then letting those assets make our purchases for us is like the farmer who sells his oranges but who never cuts down the tree. If he waits just a little bit, he can have it all.
Let’s look at another example where timing is important, even in little ways. Do you like to buy fresh produce when you go to the store? A lot of Americans enjoy seeing the bright colors of the produce aisle on their weekly trips to the store. But they may end up spending way more on items that are out of season and which have to be shipped from far away instead of just waiting a few weeks for locally grown produce that is harvested in its season. Buying fruit out of season can come with a hefty price tag asking double or even triple the normal value. Do you
really need an apple in March? Can’t you have an orange instead?
Scientists even have a name for the ability to wait for things that we want: delayed gratification. The key is to focus on the results of our sacrifices in the interim. So while it may not be very much fun to have to wait for that car, flat screen TV, or for that expensive trip to Hawaii that we want so badly, paying for it later on with money produced by our assets (instead of using our salary money now) will ensure our financial future both now and later instead of sacrificing future security for some temporary fun.