Make no mistake, deferred gratification isn’t easy. To reach her current level of financial security, Allman resisted shopping for handbags and jewelry—which she says is especially hard to do in New York. When she does spend liberally, it’s on memorable vacations. She describes her trip to South Africa last year as one of the best vacations she’s ever had.
“A lot of times people are afraid to talk about spending money around me because they believe I think everyone should be frugal,” Allman says. “But, that’s not true. If you want something, plan for it.”
Pay your bills on time. “This is a very simple rule that isn’t always followed. You’re busy. You forgot. You don’t have enough in your checking accounts,” says Allman. Automate your payments to make sure your bills are paid before their due date. Plan your budget so that you are sure you can cover your bills. If you’re looking to raise your credit score, it is imperative that you pay your bills in a timely manner.
Understand the difference between needs and wants. “There are items that we need in order to live and function, and then there are items that we like, but can live without. The line dividing what we need and what we want has become blurred. It may not be easy to determine what you can give up. But if you take the time to determine which expenses you can eliminate, you’ll be in a better position to save money, budget, and handle emergencies.”
Build up an emergency fund. “So many people get into trouble because they’ve never created a financial cushion. It is important to have funds saved up for tough times. The idea of saving nine months of living expenses scares people, but it is not necessary to save the entire amount all at once. Start out by putting aside specific amounts of money from each paycheck, and make it a goal to get at least nine months of living expenses into a liquid account.”
Don’t be afraid to ask for deals, bargains, and lower rates. “Anyone can call up their utility or credit card company and ask for a deal or a break, but this is especially important for people who find themselves in financial trouble. People often find themselves deep in credit card debt, but they don’t take the time to ask for lower interest rates.”