The Savage Truth on Money, 3rd Edition

CHAPTER 3The Savage Truth on Spending and DebtYou 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.

That process is becoming easier every day. We are well on the way to a cashless society. New technologies ranging from online bill payment to immediate money transfers via technologies including PayPal, Venmo, and Zelle mean that a generation that never lived without smartphones will be followed by a generation that never handled paper money.

Yet the basic requirements for money management remain the same. Whether you stack coins in a piggy bank or introduce your young children to saving habits via apps like iAllowance or TheBusyKid, managing your money is a learned talent and an important habit. The earlier you start managing your money—and diverting some to paying down debt, then saving and investing, the better off you’ll be.

Remember, it’s a Savage Truth: Cash flows easiest down the drain.

As demonstrated during the government shutdown in early 2019, the number of Americans with reasonably good government jobs, but still living paycheck to paycheck, was substantial. That’s a sad situation for the wealthiest country in the ...