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Hello again! If you remember at the end of last week's post, the 2 things I wanted you to pull from my story were: Plan To Save and Avoid Lifestyle Inflation.
There's an old saying "If you fail to plan then you plan to fail". This is absolutely true! Just look at me - I made no plan to save my income, made no plan to pay off certain debts, made no plans to retire by 30.
I just wanted to do all of things with no real planning or way of achieving them. How much do you want to save? By when? What do you want to pay down first? How are you going to secure enough passive income to retire by 30? These were questions I failed to ask myself, so here I am 2 years later with no real savings, in debt, and relying on a single non passive income. My goal for myself this next week is to write down some well...goals. I'm going to set financial goals for the remainder of the year, 1 year out, 3 years out and of course my goal of retirement by 30. I'm also going to share with you my PLAN, because honestly goals with no plans are just dreams. Also, please don't limit your planning just to financial goals. Where do you want to be physically, spiritually, professionally by the end of the year? 1 year from now? 3 years from now? How are you going to get there???
Avoiding lifestyle inflation is pretty difficult because... "Treat yo'self". I can't be the only one to hear that little voice when that extra cash is burning a hole in your pocket. I'm going to go ahead and label this a skill; something accomplished by the extremely disciplined. This one skill need to hone and develop. Instead of taking the extra dollars in my paycheck and applying them to debt, I opted to buy a few extra drinks at the bar, eat out a few more nights a month, subscribe to premium movie channels, upgrade my wardrobe, add an extra hair cut, buy a video game, etc. etc. etc. It goes on and on and on and once you start down this path its hard to stop and even harder to reverse. Now you have items and services you don't want to part with- they've become a "necessity" to you. Before, you were living just fine with homemade lunches, your TV streaming service, and maybe one night out a month, but now inflated you has a panic attack just thinking of living that way again. Sometimes I find myself spending next year's raise or making plans for next year's bonus and tax returns, but none of these daydreams involve a way to improve life beyond the superficial or ways to retire at 30. A little sacrifice now can save you from a lifetime of 'OK' living and 40 hour work weeks. Ask yourself if that steak dinner or extra 10 mbps in internet speed will have a long term effect on your life.
Next week, keep an eye for my goals and plans!
What are you guys' goals? How have you planned to save? Any lifestyle inflation horror stories? I'm interested to hear. Please drop a comment!