The Savage Truth on Money, 2nd Edition

CHAPTER 3

THE SAVAGE TRUTH ON SPENDING AND DEBT

You Can Control Your Cash Flow

Getting control over spending is the first step toward wealth and financial independence. For many people it is a larger hurdle than the second half of the formula: making money. Indeed, some people earn far more than others even dream of, but they still spend their lives in financial bondage. Creating financial independence starts with exerting control over your own cash flow.

If only more people had taken heed when I first wrote these Truths, I’m quite sure the bankruptcy rate would be much lower. The following section is mostly unchanged from the original edition. My advice still stands. The Great Recession has made it more important for you to understand these Savage Truths, whether you’re digging out from under or just starting on the journey to financial independence.

The Savage Truth on Spending

We Can All Spend as Much Money as We Make

Did you ever think that if you earned as much money as you’re making today, you’d be in great financial shape? Somehow our list of wants and needs always seems to grow faster than our paycheck. That’s just human nature. There’s always a way to spend the money we make, and rarely any left over at the end of the month. And if you don’t currently have enough money to pay for your purchases, it’s all too easy to create money by simply charging them.

Where does all that money go, and how can you reorganize your finances to make sure you reach your goals? If you’re ...