This article, last updated in December 2023, is original content written by Manchester, CT Financial Advisor Thomas Scanlon, CFP®, CPA.
Andy Grove, the retired CEO of Intel wrote a book, Only the Paranoid Survive. It’s tough to argue with the title of this book. We are just going to tweak this to, Only the Thrifty Survive.
The Millionaire Next Door
There was a book written called The Millionaire Next Door. It described how ‘everyday’ millionaires lived. Being thrifty doesn’t mean you have to sit a home on Friday nights with the lights turned off to save money. It does however mean you will need to do some belt tightening.
The Great Recession
The Great Recession of 2008-2009 has forced a lot of investors to become thriftier. While this recession inflicted a lot of pain to many folks the silver lining was people learned a difficult lesson. Live beneath your means.
If you’re not saving for college or retirement the way you want to or should be, changes will need to be made.
Change can be difficult. Most folks are better off making small, incremental changes over a period of time to reach their goal. Wholesale changes rarely work. For example, one day you decide to no longer go out for dinner to save money. Will you be successful with this? Perhaps you will. Normally though after a few weeks of not going out to dinner you’re right back to where you started. You are back to going out at least once a week. Most people are better served to slowly implement change. By making gradual changes, you are more likely to achieve your goal. Consider cutting back to no more than once every two weeks or perhaps limit the amount you will spend when you go out to eat.
Being thrifty doesn’t mean you can’t enjoy yourself. You can and you should. You may just need to change some or your activities and what you spend your money on.
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