Thursday, June 7, 2012

Economics 101: How much money do I really need?

Sometimes I have to sit back and think about all the opportunities afforded to me and my family.  When you really think about it, we are truly in a land where those who seize the day can succeed.  This is also the portion of the text where many of you might get a little jaded when I approach the next subject....Money!  We all need it to survive in this modern world, but how exactly do we acquire such a commodity? 

I am by no means an expert on the almighty dollar, but I've managed to get my house in order and have learned a thing or two along the way.  It is my hope to provide a blog series throughout my journey hear on some basic economics and personal finance management that everyone should know and understand.

Chinese Pu Currency
First of all, think about how much you actually need in any given year.  I'm not talking about how much you currently spend, but how much you need?  When you get down to it, you can probably make a list of luxuries or monthly bills that just aren't worth the trouble; things such as that $80 cable bill, $100 smart phone plan, or the second car in the garage.  If you were to remove just those three things, you could literally save yourself $10,000 per year in maintenance, insurance, gas, and all the other hassle that comes with the territory. 

Financial prudence isn't something we have traditionally been good at in this country, but like anything, a little practice can go a long way.  The Mrs. and myself have not had cable television for over three years and at this point, we don't even care.  Yeah, it would have been nice to see my "pictures", but was it worth the $40/month ($480/year)? thank you.  Instead, I've had more time for other productive pursuits and hobbies that have enriched my own life.  You may even find that after a few months, you don't even miss the old boob tube.

Here's some practical advise; make a list of all the monthly expenses you pay in a given month.  Review this list, and rank each bill as 1. necesseity, 2. convenience in life, 3. luxury.  Chances are, you can probably eliminate all the level 3 expenses and maybe even a few level 2 categories.  Substitutes such as Redbox, or general internet videos can make for great entertainment.  Congratulations, you just made a huge return on your investment!  In later posts I'll discuss what you can actually do with your newfound wealth, but in the meantime, check out some of my favorite sites in the "Life Improvers" section.

In closing, I leave you with a:
Wonderful Moment of the Day  = talking to my neighbors about my wifes hilarious addiction to ice cream truck icecream and literally running down said truck.

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