Todd Gould is the founder of www.stressfreefinance.com and is the author of the forthcoming book Stress-Free Finances.
October 08th, 2009 10:59 PM ET
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Little Things Make A Big Difference?

I have always been one to not suggest that people stop buying lattes and buy Microsoft stock.  I don't really believe that hard working people will stop buying their lattes and I don't think many people strike it rich by sacrificing lattes.  I do think that little things establish important habits and habits reflect a way of thinking and the way we think has a lot to do with being successful.

I was planning to buy some speakers recently and I searched and searched for the best value I could find.  I wound up purchasing some $198 Infinity Bookshelf speakers that were rated as sounding very much like $1000 speakers.  My long time friend mentioned that whatever I do it seems like he spends five times the money and it has been this way since we were in college together.

I do notice that when I compare my car and home purchases with my friend the five times ratio translates to the big purchases also.  I drive $6000 cars and the average new car is around $30K. For me, having expensive stuff does not translate into a high quality life, but being broke directly affects my quality of life.  I work harder to ensure I have financial margin than I do to get the best stuff.  I hate unreliable stuff, so I do spend time to get quality.  I am not afraid to get it used and I will wait for a deal.   

The things I love and value are related to having time to do activities.  The activities are usually not expensive, it is finding the time to do them that is challenging.  I try hard to ensure I have time to do memorable things with friends and family and it directly involves sacrificing on the earning and spending front.  

I also have a huge desire to break out of the rat race.  I do not want to be in debt to worlds financial system and I don't want to barely make enough money at work to get to the next week.  This drives me a save and invest money so that I become less and less dependent on my weekly income.   

These principles drive me to live a somewhat simple life and they have helped me develop a significant financial margin and time margin and hence gain more and more freedom.   

People definitely notice my little habits like bringing a lunch to work, only buying one latte per week, driving used cars, etc...  These little things alone don't make a big difference though.  It is the principles driving the little things that reflect a way of thinking which does make a big difference. 

Whether your goals are similar or very different from my goals, I hope you are motivated to line up your lifestyle with your principles.  I hope you are trying to break out of the rat race.     

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A blog about managing finances in a way that supports healthy relationships.
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