How To Become Wealthy by Living Within Your Means

istock_000005363862xsmall.jpgIt might surprise you, but not all rich people live like those you see on MTV’s Cribs. In fact, many of America’s wealthy get that way – and maintain the lifestyle – by making smart decisions about what to spend their money on.

Here are a few tips on how to have a healthier bank account and a richer life experience:

1. Do away with the brand names. Having more money in the bank is often more about what you spend rather than what you make. People who know how to manage wealth forgo many of the luxuries that marketers try to cram down our throats everyday.

If you watch enough television, which most of us do, you’ll tune into the fact that people try to get you to spend more money by selling brand names rather than just quality products. Take jeans for example. Blue jeans are basically the same regardless of what name is on the pocket, so why spend $50 or even $100 on a pair when you can get virtually the same thing for a lot less by buying a no-name brand? The same can be said for most of the products we buy. The point is that many people who have accumulated wealth have done so by spending responsibly. Regardless of your income, you can start becoming richer right now by opting for no-name brand products.

2. Change where you shop. Would it surprise you to know that many rich people shop at thrift stores and discount outlets? The media often portrays wealthy people shopping at places like Bloomingdales, Neiman Marcus or Botticelli. Some do and some don’t. What you buy is just as important as where you buy it. You can save a ton of money by being smart about where you buy clothes and other items. Bargain hunting isn’t just for the Wal-Mart crowd. If you want to accumulate more wealth, stop senselessly parting with what you already have.

3. Dine in. A nice evening dining out is great every now and again, but your money will be much better spent if you learn to buy and prepare your own food. For the price of one evening dining out at a nice restaurant, you can probably buy enough good food to sustain you for a week. Also, learn to pack lunches instead of grabbing fast food. You’ll eat better, save money, and likely improve your health all at the same time. That’s not just being thrifty, that’s being smart.

4. Buy used. Buying used items when possible is a great way to keep your expenses down and live within your means. Buy a used car instead of a new one. Sure, new cars are great, but if the price of the vehicle is more than you earn in a year, you’re coming out on the losing end – especially when you consider how much vehicles depreciate over time. The same is true for major appliances. There are plenty of reputable dealers who take in refrigerators, washers and dryers and refurbish them. These products operate like new and often come with some type of warranty from the dealer.

5. Stay away from credit cards. Credit cards are one of the major culprits for getting people to live beyond their means. The lure of being able to get something you can’t really afford and pay for it over time is often too much for most people to resist. The downside is that many folks get into major financial trouble when they carry too much credit card debt. Use credit cards for emergencies only and live as much as you can on a cash basis. If you can’t buy something and pay for it today, you shouldn’t be buying it all.

6. Learn to do without. I’m not suggesting that you starve or live like a hermit. But if you’re really interested in accumulating wealth, then you need to think about what you need versus what you want. Do you NEED a new cell phone with more features and a more expensive plan? Does your family really NEED a pool? How about an LCD TV with surround sound? Need it or just want it?

Now I’m not suggesting that you don’t indulge yourself from time to time, but most of the things we want aren’t designed to improve our lives; they’re just designed to get us to spend more money. Remember: the person who dies with the most toys, still dies.

Spending your money wisely will enable you to save more and live a more stress free life in the process. I’m not going to guarantee that you’ll become a millionaire if you follow these tips, but I WILL guarantee that you’ll definitely become a richer person in the long run.

Thanks to Wealth-O-Nomics for featuring this post in the Wealth Management Potpourri, to Funny About Money for including this post in the Festival of Frugality, and to Monroe on a Budget for publishing this post in the Festival of Frugality, to Your Finish Rich Plan for inclusion in the Rich Life Carnival, to Tip Diva for featuring this post in the Carnival of Tips, and to Credit Card Lowdown for featuring this post in the Carnival of Money, Growth, and Happiness, to How I Save Money for inclusion in the Carnival of Wealth, Money & Life, to No Debt Plan for publishing this post in the Festival of Frugality, to Broke Grad Student for including this post in the Money Hacks Carnival, to My Dollar Plan for publishing this post in the Carnival of Financial Goals, to Money and Values for featuring this post in the Carnival of Ethics, Values, and Personal Finance, to Tales from the Road Less Traveled for including this post in the Carnivals and Link Love, to Everything Finance for including this in the Carnival of Everything Finance, and to FinancialGuruOnline for publishing this article in the Carnival of Financial Planning.

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