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Sacrifice to Get Ahead

April 11, 2010

Mastering your personal finances is not complicated when you break it down into its simplist form.  You need to earn more than you spend so you can save money and have enough to survive after you stop working.  If you spend more than you earn, you have two solutions:  Make more money or spend less money (although this is a foreign concept to our national government). 

Most people are aware of how much they earn, so the first step toward mastering your finances is to track your spending.  Once you know what you are spending, see what you can cut out.

This is where many people run into a problem.  We are a society that does not want to wait.  If we want something, we want it now.  For those who do not have money to buy it, it waseasy to get credit to finance it in the past few years .  

Whether it was a new car or a flat screen TV, most stores would let you sign some papers and walk out the door without giving them a cent at the time of purchase.  This has put the average American household with at least one credit card more than $10,000 in credit card debt.

I’m just finishing the book, “The Greatest Generation,” by Tom Brokaw.  In this book he tells the stories of many Americans who grew up during the Depression, fought in World War II, and built the U.S. postwar economy.  “Sacrifice” has been a constent theme as I have read through this book.  

Many people had to learn to grow up with nothing during the depression, so they knew what it meant to go without.  In addition, more than 16 million served in the military during World War II, with more than 400,000 giving the ultimate sacrifice of their lives to protect our freedoms.

After this experience, one would think these brave men and women would be tired of sacrificing and ready to do something for themselves.  This was not the case.  This generation came back, worked and saved to make life better for their children, which have come to be known as the “Baby Boomers.” 

It is estimated as more people from the “Greatest Generation” die and leave their legacies to their children, it will be the greatest transfer of wealth ever at around $25 trillion.  They did this by working hard and saving.  The purchases they did make was in moderation. 

In 1950, the average sized single-family home was 983 square feet.  In 2004, it was 2,349 square feet.  After growing up with little during the Great Depression and facing death during World War II, they continued to make their mark by being good stewards of their earnings.

As a society, we need to be willing to sacrifice more than what we are used to.  We need to not buy things we can’t afford.  We need to save more and spend less so we can ensure our future and pay it forward to the next generation.  We need to be willing to leave the store with a little less than what we wanted.  We need to remember how good it feels to sacrifice a bit now for a big payoff in the future. 

If we do not learn this lesson as individuals  — and as a nation — we will squander the abundance we have received from those before us, who learned how to do without so that our lives would be enriched. 

Become a great wonder!  Master your personal finances today.

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