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Getting Started

Three Guiding Principles

#1 Earn More Than You Spend

This is “IT” in a nutshell. It sounds so simple, but if you do nothing else to improve your financial life, this is the most important. To state it another way, “Spend Less Than You Earn (and Save the Rest!)”. If you spend more than you earn, or even the same amount of money that you earn, you simply won’t have the extra money needed to save, pay down debts, invest, or accomplish any other personal financial goals and life dreams.

#2 Live Well on Less

This principle is really simple because it’s all about your attitude concerning “stuff”. Adjusting your attitude costs nothing. We’re not talking about deprivation. This is about consciously select-ing how you spend your money, aligning your values and not frittering money away on things that don’t matter to you. Most of the things that give true and lasting happiness do not cost much money, and there are many ways to do the things you enjoy without breaking the bank. You can live a very rich life without being rich! It takes some creativity (that’s part of the fun of frugal living), along with an awareness of what matters most to you.

#3 It’s Never Too Late

Even if your financial past has been a disaster, you can hit the ‘reset’ button any stage of life. If you have never been able to save a dime, today is a new day. And you don’t have to be young to learn new tricks. By embracing a new lifestyle that centers on principles #1 and #2 above, you will experience less financial stress, enjoy life more, and begin saving for your future.

Download our PDF guide to Goal Setting & Financial Planning.

Create a Spending Plan (a.k.a. Budget)

Track how much you earn and how much you spend. Sort your spending into categories that match your life’s most important goals.

Most people call this a budget. We like to call it a Spending Plan—it emphasizes the positive—that spending money is OK as long as you remain true to your life’s goals.

A Budget Template is available in our Goal Setting & Financial Planning guide (PDF).


  • Short-Term Savings: Save FIRST for life’s emergencies. Experts recommend an emergency fund of at least 3-6 months of living expenses. Then pay down debt (and pay off high-interest debt like credit cards). Then save for short-term goals: your next vacation, or starting a business.
  • Intermediate-Term Savings: Save for intermediate goals: college education for you or your kids, or a future career change. See our Five Proven Strategies to help with longer-term investing.
  • Long-Term Savings: The number one long term goal: Saving for retirement. See our Reap the Rewards section for retirement tips.

Save for Retirement (5 Questions to Ask Yourself)

No way around it: this is essential, and the time to start is now. Ask yourself these 5 questions to get started in your planning:

  • When do you think you might retire? (average age in the U.S. is about 63)
  • How much do you currently have set aside for retirement? (Note: include financial assets only)
  • What do you think inflation might be in the future? (Historic average is 3.5%)
  • What do you think you might earn on your savings? (Conservative estimates: 3 to 6%)
  • How much will you need on an annual basis to maintain a comfortable retirement?

Good news: there are many online Retirement Calculators to help answer these questions: Here are a few of the best: