As you may know, we’re huge fans of budgeting and saving but I am often asked, “what’s the point? I am already OK for money, why would this help me?” So, today, I’d like to look at a success story which involves somebody in just that position.
Darren and I are examples of people who came from nothing by saving. But J P Livingston may have us all beaten for impressive feats. She saved 70% of her income every month, while living in New York (which is not a cheap place to be) and then she retired at the age of 28 with $2 million in the bank!
How You Can Learn From J P Livingston
- Cut back on the big-ticket spending. You don’t need a huge apartment while you’re still paying off your student debts. You don’t need a big car if you don’t have a family to put in it. And so on…
- She bought second hand. You don’t need new stuff. Especially in big, rich cities like New York. People get rid of things at the slightest whiff of a fashion change in big cities and they sell them cheap. Buy stuff second hand and save a fortune over buying new.
- Think about your purchases in cost per hour. How much do you earn on an hourly basis? If you don’t know – create a budget. Then look at everything you buy and ask how long do I have to work to buy that? If you make $50 an hour. Then you work for 6 minutes to pay for a coffee and 14 hours to buy a good smartphone ($700) and for more than a month to take a luxury vacation ($10,000). Does that make sense to you? Cut out what’s not worth the effort.
So, yes. You can benefit from budgeting and better understanding your finances even if you’re not where Darren and I once were. If you are in debt, and you are struggling to see a future, you MUST do this. But everybody SHOULD do it!