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Smart Spending Tips


Are you or your spouse a compulsive shopper or an extravagant spender?
Spending too much money could kill your hopes of a comfortable future and
even possibly destroy your marriage. While knowing how to handle your
money can make a big difference.

Ray LeVitre, certified financial planner and author of the Twenty Retirement
Decision You Need to Make Right Now shares some ideas on how to change
those spending habits.


If you are impulsive or buy expensive things you are likely more concerned
with status and extra comfort that you are about wealth. If you want to
accumulate wealth you will look for opportunities to cut your spending so
you can keep your savings rate is high. Let’s take your car. I have a client
who just bought a Mercedes and now has a $650 per month payment. She
could have paid cash for a nice used car and avoided the monthly payment.
She could then save the $650 toward here future. She chose status over
becoming wealth.

Let’s assume she continues to trade her cars in and buys another one with a
$650 month payment. From 1993 to now she would have paid over
$140,000 in car payments. Let’s see what she gave up. If she would have
invested in McDonalds she would have over $500,000 and if she was lucky
enough to buy Apple she would have over $4 million. So you have to ask,
“Do you want status or wealth?”

In Texas it’s called “Big Hat, No Cattle.” If you choose to buy status before
you have wealth you will always be poor.

It would be interesting if people posted what they owe on their cars. Would
we see a nice car and think, “wow, that person must have money,” or would
we think, “that person is not very smart and poor.” In fact, in our example
this person owes more than the car is worth and actually has negative worth.

We’ve used a car in our examples but the same is true if you compare smaller
purchases like brown bagging versus going out to lunch each day. Or,
buying expensive designer clothes or just nice clothes, or going on pricey
vacations or controlling vacation cost.

The bottom line is that controlling your spending will allow you to save more
and saving more will boost your wealth.



You can pick up a copy of Ray’s book at Barnes and Noble or if you are near
retirement or recently retired you can visit our website, http://networthadvice.com/ and
request a complimentary copy of my book. Just click on the “Contact Us”
link and request the book.

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