Planning a budget is like holding up a delicious ribeye steak in front of your face and telling yourself not to eat it. Sometimes you need more than just your willpower to keep the course. Careful planning will help you during the several months or years of commitment that the budgeting will last. But if you can’t trust yourself, see what can you learn from famous celebrities to help control frivolous spending.
Work on Your Financial Plan
Who better to learn from than the richest man on the globe, Bill Gates? In the 2013 annual letter for the Bill and Melinda Gates Foundation, Gates stated “You can achieve amazing progress if you set a clear goal and find a measure that will drive progress toward that goal… This may seem pretty basic, but it is amazing to me how often it is not done and how hard it is to get right.” Treat your budgeting like you would a workout regimen or playoff pool – something you spend countless hours thinking, planning and mulling over.
“You can achieve amazing progress if you set a clear goal and find a measure that will drive progress toward that goal… This may seem pretty basic, but it is amazing to me how often it is not done and how hard it is to get right.”
Only Buy What You Need
This simple advice often goes disregarded to disastrous lengths. Rather than learning from your own financial mistakes, draw your lessons from guessing who this popular Hollywood actor is. His frivolous spending not only caused him to squander a $150 million fortune but also ended up owing the IRS $13 million. The money went to buying Bahamian islands, a pair of albino king cobras, an alligator, a shark, an octopus, a haunted New Orleans manor, European castles, a private Gulfstream jet, high-end jewelry, rare paintings, shrunken pygmy heads and an authentic dinosaur skull. One final clue is that, in an effort to recuperate his financial losses, he appeared in 28 movies since 2010. He is none other than the eccentric Academy Award winner Nicolas Cage.
Leave your credit card at home. There is no need to pay interest on money you have already spent. Debt is the one great setback when it comes to budgeting and saving money. One way around it is to use cash exclusively. Withdraw a certain amount and limit your weekly expenses to what you have in your pocket. Another option is multi-billionaire Warren Buffett’s modus operandi, in which his wife hands him a certain amount every morning – always less than five dollars – to spend on breakfast.
Leave Your Savings
Former host of the Tonight Show Jay Leno has amassed a wealth that includes 286 vehicles. Yet he has never touched the money he has earned from appearing on television. How could this be? Leno says “When I was a kid, I had two jobs… I’d spend the money from one job and save the money from the other. That’s still the way I am now. I live on the money I make as a comedian, and I put all the TV money in the bank. I’ve never spent a dime of TV money—ever.” Rather than working two jobs like Leno, just set aside a certain amount to invest in an IRA or 401K so that it will remain untouchable and left to grow.
Alex Correa | The Edge Blog