This Part 2 of a 7 step series applying teachings from the famous book “The Richest Man in Babylon” to Bitcoin as a revolutionary savings technology.
The second step in accumulating wealth according to The Richest Man in Babylon is to control your expenses.
This rule fits hand-in-glove with the first rule, in which you pay yourself first, a minimum of 10% going into savings every time you get paid.
A common objection among people today is that they simply cannot save, they are stretched too thin. But upon close examination, most have not really “run the numbers”, which is merely an excuse not to get started in saving.
Live like no other now, so you can live like no other later.
By getting ahold of your input and output, controlling thy expenditures, your can easy make inroads toward saving 10% of your pay in Bitcoin.
Is Those Things You Buy “Needs”? Or Are You Just Blowing Money?
We all have desires, but yet we all have limitations as well.
Have your desires become a burden upon you? How could this happen?
We all have more desires then can be fulfilled. You can only eat a certain amount, you only have a certain amount of time in the day to be entertained, and there are limitations to where and when you can travel. But our desires far exceed what we can actually accomplish.
Advertising has pushed our collective mind in to a place where we often spend far more on things then we have the ability to enjoy. Or we buy luxuries when they are unnecessary.
Either way, self reflection, looking inward is the answer. Separating “needs” from “wants” gives us the awareness we need to find that 10% to save monthly.
Study Your Living Habits! Do You Really “Need” That?
By studying our living and buying habits, we often find that we have accepted expenses that truly do no bring us the value that we pay for them.
“Let they motto be one hundred percent of appreciated value demanded for each coin spent”
Are you really getting “full value” for each dollar you spend?
Areas to investigate might include the following:
-Entertainment (Event tickets, streaming services, cable TV)
-Eating out rather than cooking at home
-Luxury car payments
-Insurance (shop around!)
-Owning or renting more “house” then you need
-High interest rate debt that is easily refinanced
-Online shopping sprees
Now the point here isn’t to declare that you must go live in a cabin in the woods with zero modern comfort. But we all can take a step back and do a little self examination and figure where we are wasting money. Several hundred dollars a month can be found if significant changes are in order.
We’re all going to have our own little indulgences, the things we really enjoy. Keep those around - get that “real appreciated value for each coin spent” and then ditch the other things we don’t get full value for our money on.
Create a Budget? Track Your Spending at Minimum
Yes, budgets can suck.
But here is the easy way to just raise awareness.
Don’t make a full on budget that is do-or-die…Simply track everything you spend money on for a month or two.
Get a little notebook, or open a Note on your iPhone. Each time you spend money on something, write it down. Your discomfort at doing this proves out something right away - that you’re wasting money on things you don’t really need.
By doing this, you’re exposing a bad habit - spending on things that are “casual wishes” instead of on 1) necessities and 2) things that bring definite and gratifying purpose to you. Removing bad habits and building good ones will change your life.
In time, you may decide a full budget helps you along the way, but by first paying yourself, second paying for necessities, and then third spending on wants you will be well along the road to financial independence.
The Reason You Must
Building habits and disciplining yourself may not sound like much fun, but the rewards and good feelings kick in fairly soon after you begin. Read a book like Atomic Habits by James Clear for an excellent overview of how quickly you gain momentum.
The shifting sands of the current financial system are going to inflict additional pain on the common man, and soon.
Inflation is here to stay, the debt levels are so high right now that there will be additional inflation no matter what, as governments try to rebalance their account.
All of this means you must seek shelter or be devastated financially over next decade or two. Buying, saving and storing Bitcoin money will be your shelter.