The Ten Commandments of Frugal Living

I am not much for Biblical metaphors but this time it works. Memorize the following commandments of frugal living:

1. Thou shalt not buy stuff unnecessarily. As my former CEO and dear friend Ray Zinn advises, buy what you need, not what you want.
2. Thou shalt make cash king. (Thanks to Ray again for infusing this into the company culture). This is the very reason I can spend time writing this blog. When I struck out on my own and started consulting I was shocked to find that I not only had cash at the end of the month but I had cash to continue to add to my emergency fund. That’s frugal living.
3. Thou shalt pay yourself first. Continue to add to your savings every month, without fail.
4. Thou shall not covet thy neighbor’s stuff. Beware the green eyed monster. Just because your neighbor (likely) goes into debt buying a new car or ATV or jet ski, it doesn’t mean you should too. Find value within yourself, not what you own.
5. Thou shalt reduce one’s burn rate to absolute minimum. Low spend rate equals financial freedom.
6. Thou shall invest in one’s future wisely. Did you know most billionaires usually have just a bachelor’s degree? Unless you have your heart set on being a neurosurgeon, you should consider very carefully the long term financial consequences of student debt from advanced education.
7. Thou shalt create and budget and stick to it. When a relative called me up crying about having financial trouble living on her own, I worked with her on a budget and found out that she certainly could afford to live on her own if only she would give up weekly manicures, twice monthly hair appointments, impromptu trips to Vegas with her girl pals, an expensive trendy gym that she rarely used…the list of her spending habits was long and very revealing. I can’t say it was a huge wake up call for her but at least she knows where her money goes now.
8. Thou shalt create long-term financial goals as motivation for frugal living be they early retirement, more career freedom or something else, goals help keep you on track.
9. Thou shall cease eating out save for special occasions.
10. Thou shalt not buy a new car every other year, or even every five years.