Living Rich by Spending Smart

How You Spend Matters More than What You Earn

Want to become wealthy and retire debt free? Then, spend judiciously. This is the cornerstone of any wealth-building program. It is far more important than the investments you make, how much you owe or even the amount of your annual salary. Spend wisely and you can become wealthy. Spend stupidly and you never will. Carve it in stone: Money out is as vital as money in.

Generally, you can’t control how much you earn. But you can determine what you are going to spend and, when it comes to building wealth, that makes all the difference. Consider: If you earn $30,000 annually, discontinuing your $50-per-month cable TV service is equivalent to a 3.3% annual raise. Find similar bills to cut and even more money will remain in your pocket. Cutting back on expenses has an immediate positive effect on your financial situation, but getting a raise could take months, even years. Earning a salary is like playing offense in a football game; cutting spending is like being on defense. Sport aficionados know that while razzle-dazzle offensive plays are fun to watch, the defense always wins the titles. You can become a wealth-building, defense...