When your budget won't let you give gifts to everyone in the world—which is always, by the way—who should you give...
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Despite being the most affluent generation the world has ever seen, 54% of Americans have saved less than $25,000 for retirement. We're sacrificing our retirement to support our lavish lifestyles—big houses, cars, boats, flat screens, you name it.
Few people can embrace the idea of cutting back their lifestyle and settling for the basics. But, if you're going to "do what rich people do," as Dave says, forget about impressing your neighbors. Instead of seeking satisfaction in what you buy, why not consider gaining satisfaction from a simpler lifestyle?
Proof That Simpler Lifestyles Work
For more than 30 years, Dr. Thomas J. Stanley has studied the habits of wealthy people, revealing his findings in several books, including Stop Acting Rich and The Millionaire Mind. His groundbreaking research has uncovered the truth about the lifestyles of the wealthiest Americans.
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Dr. Stanley posted a letter from "Mrs. C.C." on his blog, thomasjstanley.com. Mrs. C.C. has a net worth of more than $1 million, but she has never made more than $60,000 a year. "I have accumulated most of my net worth by living below my means," she said. "I have everything I want, but I have learned not to want too much."
In another letter, "D. Termined," who, at age 55, has a net worth of $2.4 million, describes his family's lifestyle. "I think I paid $67 for a pair of shoes once, and my watch is a Timex," D. Termined said. "My wife has shopped at thrift stores for many years and uses coupons extensively."
There are no granite countertops in his $200,000 house, which was paid off more than 10 years ago. Money saved on the house payments went into savings.
Mrs. T, who is also financially independent, gives 10% of her income to charity, put four kids through college without debt, shops at T.J. Maxx, and drives a Ford Taurus. She told Dr. Stanley, "I am extremely happy with my life."
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"Here is yet another case to support my strong contention that satisfaction in life does not come from what you can buy in a store, but rather from the values, beliefs and behaviors that most wealthy people possess," Dr. Stanley concluded.
While it is important to save and invest for the future, it is also okay to enjoy nice things. Denying yourself the pleasure of new gadgets when you can truly afford them is no healthier than buying gadgets you can't afford.
Some people will be compelled by fear to save more than they need to. Instead of spending money to feel good, they save money to feel good. But the effect is the same—you can never save enough money to feel totally secure if fear is driving you.
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