I recently attended a conference for work and in a session on personal finance, the speaker espoused that one cannot get rich by cutting out small luxuries because “necessities” are so expensive. This speaker went on to say that you’ll never “save your way to financial stability” and that the best thing to do is focus on making more money. Needless to say, I disagree with this stance for a number of reasons:
1) In fact you CAN save a great deal by living frugally and carefully monitoring your expenditures. We save over 65% of our take-home pay every year (that’s after we max out our 401ks).
2) Necessities don’t need to cost an arm and a leg. This speaker talked about cars, houses, and groceries as if they were immutable costs. I wholeheartedly disagree. A large, expensive, fuel-guzzling car is not a necessity. An enormous, energy-inefficient house is not a necessity.
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