Debunking a Myth about the Financially Successful

 

Lady holding Purses

My wife and I have recently started to shop for groceries at Aldi’s.  I have to admit, I have always thought of Aldi’s as the grocery store for those that are struggling to make ends meet.  However, after my wife’s latest grocery run, she made an observation that shocked us both.

My wife noticed that a good number of the people shopping there are people that we know are doing well financially.  When she got home she shared with me that fact and I was a little caught off guard.  Then, the next evening I was running some errands and I thought I would take a peak and pay closer attention.   And to my surprise, one of the first things I noticed was that there were mainly newer cars in the parking lot.  Now I would be the first to tell you that just because you drive a newer car does not mean you are winning financially.  But to be honest, I was expecting a lot of 1980’s cars, not newer vehicles.

What’s the Big Deal?

One of things I have learned is that if you want to win in any area of life, find people that are winning and copy what they do (and that includes with your finances).  Now that does not mean the moment you start shopping at a store like Aldi’s you are going to be a millionaire.  However, what it proves is yet again people that really are winning with their finances do not attempt to keep up with the Jones’s.

According to a survey conducted by Millionaire Corner (surveying those with a minimum net worth of $5 million dollars or more), 41% shop at Target (vs. retail stores that target the rich) and almost half shop at Costco and a third shop at Wal-Mart.  It is not uncommon at all for those that are doing well to also shop at places like Goodwill and other consignment stores.

A Myth Debunked

I think there is a myth out there that goes something like, “When people are well-off financially, they buy everything new… goods from boutiques, new cars, new designer clothes, and food at luxury grocery stores.”  Maybe we get this idea from reading about Hollywood stars in tabloids, but this is not how the average American millionaire lives or the habits that got them were they are.  But what people who are financially well-off typically do is live within their means and develop habits of discipline to save money and invest.  And, just because they “arrive” at having a good amount of disposable income, they usually don’t change their money habits from being responsible and disciplined to suddenly being impulsive spend-a-holics.

Do you see what I’m saying?  The typical middle class income producing American thinks that rich people act a certain way and they proceed to emulate that imaginary lifestyle – which doesn’t get them where they want to be financially.  Trying to keep up with the imaginary Jones’s is preventing them from going to the next level where they can truly have more to save, give, and invest.  But besides changing your thinking of how a millionaire acts and lives, you can start with simply tracking your expenses.  Is it really that easy?  Yes, it is.

“Tracking our expenses was really revealing.” – Jon E.

What Does That Have to do About Me?

Often during my free session I will ask potential clients about their spending habits.  More times than not, they usually talk about how they know they overspend some, but they are not purchasing fancy clothes or take expense vacations to Hawaii.  However, after they become my client, their first action item is to track all of their expenses for the next 30 days.

One of our success stories shared the impact of tracking their expenses the first 30 days.

Jon & Patti“Tracking our expenses was really revealing.  It is good to put things under a microscope and know where you are at.  When you don’t know where you’re at there’s frustration and fear of the unknown.  Once you bring light into the situation it is a bit difficult to look at sometimes because it is a little ugly but then at least we know where we are at and now we can go from here.” – Jon E.

Tracking Challenge!

I am going to issue this challenge.  After reading this blog I want you to track all of your expenses for the next 30 days.  Don’t worry, I am not asking you to find some fancy software or make categories that you color coordinate and have five tabs in one spreadsheet!  Whether it is a yellow pad or an iPad, record every transaction from a stick of gum to a purchase of a house.  Then review 30 days later.  Notice what spending habits you can be proud of and also embrace the areas of struggle.  Now you have some data to know where you need to make adjustments.

Tracking does not have to be a way of life (especially if you follow the “Four Key’s of Budgeting”). In fact, after the first 30 days, my clients no longer need to track (if they are doing a budget).

Accountability

If after you reviewed your results you want to make some changes, consider having someone hold you accountable.  If you do not know where to start from here, this is where a financial coach can be a huge help.  Consider registering for a free session and find out how a financial coach can teach you all you need to know about personal finance while holding you accountable.

Where do you shop to purposefully save money?
What are some frugal habits you use on a regular basis?

Justin Bennett