1. Keep PerspectiveYour investments and savings are ultimately a means to an end. The value of your portfolio rests in the enjoyment and security it provides for your family. This is often the reason normally rational individuals behave irrationally when it comes to their stock holdings; they secretly view each up and down tick as feast or famine.
2. Get off the Consumption TreadmillYou will never experience financial freedom until you have stepped off the consumption treadmill. Once you slip into the habit of borrowing tomorrow’s income to pay for today’s expenditures, you will begin to loathe money and possibly even your job or occupation. Instead of viewing it as an outlet for your talents, gifts and ambitions, it becomes a series of endless tasks you must complete if you hope to break even at the end of each month.
3. Setup Auto-Withdrawals from Your Checking or Savings AccountMany brokerage firms allow you to set up regular deposits by electronically transferring money from your checking or savings account each week, month or quarter. This is a very effective way to begin saving because you don’t actually see or miss the cash. On the same note, if your employer offers an automatic withdrawal option for your retirement account, you may want to consider joining.
4. Educate Your MindThere are hundreds of excellent finance, investing, economics, accounting, business and management books in the world. A few hours of well-directed reading each week can have a fattening effect on your pocketbook as well as give you something to talk about at your next cocktail party.
5. Reward YourselfClipping coupons and reducing household expenditures does not mean you have to live the life of a miser. Set financial goals and reward yourself when you reach those goals. Positive economic incentives can do marvels for productivity, and you may not find it nearly as difficult forgoing current consumption if you know a new pair of Allen Edmonds is in your future. Besides, when you associate a luxury good with an accomplishment, it has much more meaning and value.