"The wisdom of life consists in the elimination of nonessentials." - Lin YutangMy Best Frugal Living Tips
Don't try to keep up with your neighbors' possessions. Your neighbors with the Jaguars and Beamers in the driveway might have leased cars and could be up to their eyeballs in debt. Many people in the U.S. are not saving enough and have too many debts. If you want to be rich you can't follow the herd because most of the people in the herd are never going to be rich.
Related link: Luxury Homes On The Block.
Don't spend a lot of money on the latest fashions that will be out of style next year. Buy basic, well made clothes you can wear until they wear out.
Buy modestly priced new or slightly used cars with good repair records and drive them until they wear out. A used Honda can go the speed limit and get you to your destination just as effectively as a Jaguar. The Honda also will depreciate less, cost less to repair and less to insure.
Related Article: The Real Reason You're Broke (hint - it might be your cars) - a good article from MSN Money
Always think of costs and gains of purchases and investments over a ten year or more horizon. An extra $10,000 spent today on a new luxury car means a lost opportunity cost of investing that money. At an 8 percent return, a $10,000 lump sum invested today would be worth around $20,000 in nine years. (An easy way to remember this is the rule of 72 - divide 72 by the interest rate and that will give you approximately how many years it will take to double your money.)
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