Outsourcing: Do you really need a housekeeper, landscaper or a pool cleaner? Or are you trying to keep up appearances for neighbours. *AFP photo
Outsourcing: Do you really need a housekeeper, landscaper or a pool cleaner? Or are you trying to keep up appearances for neighbours. *AFP photo

The amount of money you have at your disposal is not always dependent on how much you earn. Whether you are a high or low salary earner, how you choose to spend your money is what makes the difference.  These choices are reflected in your bank balance.

When you put everything before your finances, it’s easy to spend more than you budget each month. Normal practice seems to be that the more money one makes, the more one spends.

However, the secret of financial independence is not living paycheque-to-paycheque but rather by following some simple life lessons and changing some bad habits.

Do we really need to have a one-year-old birthday party catered or have a housekeeper, landscaper and a pool cleaner? Many people do but the question is do they have the income, savings or financial independence to maintain such a lifestyle? Chances are they probably don’t, which makes us a generation that cares more about appearances than financial independence and stability.

We are familiar with the term “frugal,” however being frugal doesn’t mean giving up the things you love but changing your attitude towards money. Being frugal means satisfying your needs first and only once you’ve done that will you give into your wants.

Addressing your financial situation is important; ignoring it will only make it worse down the road. The most important step is to be accountable. There may be many factors that contribute to our financial situation, but ultimately we make the decisions and the choices.


Take a long hard honest look at your finances — your budget, income, debts and expenses — and try to understand where your money is going and where you can budget better. Live below your means not up to your means or, even worse, above your means.

Those who are successful in reaching their financial goals are those who have created a plan from the beginning. Decide if your goal is to be debt free, build a savings account of a certain value, or live on one income in a two-income household. Then decide how you’re going to get there. Working with a financial planner will certainly help you and they will be able to give you an independent financial overview with steps designed to reach your goals. They will also identify the obstacles standing in your way such as credit card debt.

A few years ago I was talking to someone who said they spent $15 every day on lunch because they couldn’t be bothered to bring lunch from home. The difference between people who are frugal and those who are not is that frugal people can be bothered, and frugal people choose not to spend money on anything they can do themselves. They don’t “outsource.”

It’s important to focus on your own finances and being committed to becoming financially independent. Being financially independent for most of us means sacrificing. I remember someone once telling me this great quote “True wealth is not measured in possessions, but in assets.”

If your house is worth $1.1 million but you owe $960,000 then your wealth represents $140,000, not $1.1 million. So your focus should be on creating more wealth by decreasing your debt and increasing your savings.

It’s time to get honest about your spending habits and with tough times in the economy, tough choices need to be made. Living “lean” or “frugal” might be a sacrifice today but it will provide you with a better, long term tomorrow.

Carla Seely is a Senior Wealth Manager at AFL Investments. She may be reached at 294-5712 or cseely@aflinvestments.bm