I have suffered a dramatic change. I have had to move from “spending” to “not spending”. I built my personal financial system carefully over years and years of spending money, sometimes cautiously, sometimes rashly and sometimes wildly. At all times I planned, saved and budgeted, always keeping spending directly linked to earning. Now I’m in a “hold spending” period. I saved hundreds of dollars in 2011 by getting some good deals on financial products. You can do it too.

 

Years ago I fell into the habit of accompanying my wife on her trips to the supermarket. These outings ranged from ‘totally boring’ to ‘mildly interesting’ until I discovered that there’s a man’s world in the supermarket. I discovered the 10 varieties of olives, the 20 varieties of pickles and the carousel of fiery hot spices. I found the exotic cheese counter and the cheap tee-shirt rack. I bought what I fancied. My job was great, the salary package was generous and I always had money in the bank.

 

At about 9am one morning I received a phone call from the owner of the company I was managing: “We are closing down. Not enough work, blah, blah, blah… the faltering hi-tech industry, yak, yak, yak… Our shopping trips changed. I still accompany my wife. We go to the supermarket – with a list. We buy the items on the list and come home. Money saved: Considerable.

 

In the good old days when I had a problem with money, my first port of call would be the bank and my friendly bank manager who would always lean over backwards to help me. That’s gone. These days when I have a problem with money I put as much distance as I can between me and the bank. I’m just another customer and I’ve never met the manager. I changed banks recently, mainly because the bank on Pine Street offered better deals than the bank on Elm Street. If the bank can treat me a casual customer, then I can treat the bank as a casual service.  

 

I had sudden urge to make sure my “papers” were in order in case I got hit by a bus. The results were surprising. Other than stuff like life insurance, pension and savings which I regard as a ‘do not open’ box unless the agent is present, I looked at such fascinating items as household and auto insurance. It’s been years since I received these policies. If you work on the basis of ‘no claims, no look’ as I do, the years slip away. I took them out and called a couple of new acquaintances in the insurance business. Surprise! The trusty old agents I had used all these years were no longer looking after my interests. They were renewing my policies every year without looking at the premiums. I replaced these policies with a new agent and saved huge amounts of money for the same coverage. I also told the new agent that I would be shopping around for new quotations at every renewal date. If the old agents didn’t look after me do I still have to look after them?

Ever since that recession started back in 2008 causing the values of securities tied to U.S. real estate pricing to crash, damaging financial institutions globally and sinking my little portfolio into the mud, I have been living frugally, rather like Old Scrooge. First I stopped spending on things I didn’t need and than I stopped spending on things I did need. 4 years later I am still scrimping and saving like mad, not spending a penny if I can help it. I mean I even walk the mile to work and back every day to save the train fare! Yes, in winter too!

 

But good luck was with me all the way. Firstly I never had a single emergency in all that time that would have forced me to break open my savings. Secondly and most importantly, my income remained stable so with all my holding back on cash, my savings flourished. Now, 4 years later, I have built up a nice pile of money and I have decided that 2012 will be “The Year of the Big Spender”.

 

I am going to spend on my hobbies. I am a jogger and a marathon runner. This year I will start by buying myself a new running outfit, maybe even two. They will include the latest expensive running shoes. After that shorts, vests, headbands, towels and all the other paraphernalia that I have done without for the past 5 years. I will also enter for the London, New York and Paris marathons, something I never did before because of the cost of getting to these cities. And while I am in them, I will stay an extra 2 or 3 weeks and enjoy the sights.

 

I painted in Italy years ago, in the good old days. I am going back to paint there again. Maybe even twice, once in Venice and again in Tuscany. I may make a third trip to France and paint in the footsteps of Monet, my impressionist hero. I will start in Paris at the museums where his art hangs and then go down to Giverny where he lived and worked. I will also buy Monet prints.  

 

I want to spice up my life in 2012 by attending a couple of cooking courses in Italy. I am busy researching the subject at the moment and deciding which ‘tastes’ I think I will enjoy the most. Italian food varies dramatically from the south to the north.

 

I have been to many operas. I love the sights and the sounds of a well performed opera. I have also seen opera in most of the world great opera houses, La Scala,

Covent Garden, Paris, the Metropolitan in New York and many others. It’s time to see the Sydney Opera House. So that’s my destination for my first flight. My ticket is booked for the January 15. And on January 21st I will see Mozart’s Magic Flute!

 

Maybe I should work for another couple of years to boost my savings? Nah, I’m spending it!

What happens when we are bombarded daily by media images of people who drive fancy cars and live in big mansions, holiday in Barbados and travel first class, drink fancy cocktails and send their kids to private schools overseas? What happens is that these shallow chronicles of consumption skew our relationship with money to a point where many people see money as a badge to display.

 

Money comes in lots of different ways. Some of the jet-setters may have inherited their wealth, robbed a bank or belong to the noveau riche class, and some are actually hardworking entrepreneurs who have invested years, effort and resources on an idea until it became a business success. The latter, which hopefully the majority look up to, have had their challenges, including the failures and sacrifices that come with the entrepreneur’s path; it’s called blood, sweat and tears!

 

There are very few successful business people who did not have to work hard and who hit gold on their first attempt. Even some of the world’s most renowned entrepreneurs, like Richard Branson and Mark Shuttleworth, will tell you that the first thing they tried bombed spectacularly but they kept at it, refining their approach and sometimes even leaving behind their first career choice to try something new.

Money that comes easily is difficult to appreciate; remember the saying and song: “Easy come, easy go”? The truth is, money doesn’t buy happiness, success does. Though success is often accompanied by wealth, it is not the money that makes us happy, it’s getting it; it’s the pursuit that is often tied to a vision that makes having money such a pleasure.

 

There is evidence aplenty if you Google past lottery winners. The tales of woe far outnumber the tales of happiness. Filling in lucky numbers on a form does not equate with working hard for your success, and the emotional baggage that accompanies these sudden wins makes that clear.

 

When we get extra cash, such as employment bonuses, the question should not be how to spend it, but rather how to save it or invest it. Many see money as something that lets us buy things, things to validate us as important or successful people and things we probably don’t need. Things don’t make you happy, but what does is to use money as a tool to liberate you from debt and to make things happen, to create a better future, not just for yourself but for your family and for your community.

 

The first thing to do when you get money is to think about how you can get it to work for you and liberate you from working hard for it. It may take a dollar at a time but believe me, a dollar at a time is a dollar closer to comfortable retirement, a dollar closer to paying off your debt and a dollar closer to financial freedom.