Loved this so much I had to share this with you. Please read and get inspired.

How I became financially free: Readers share their secrets – from the Globeadvisor website. see credits below.

Readers share strategies they’ve used to cut expenses and get out of debt. With the economy softening and a recent survey indicating that more than half of Canadians are living paycheque to paycheque, saving… money is a timely topic.

I’ve reprinted some of the best responses here in condensed and edited form. The ideas may not strike you as revolutionary, but they prove that ordinary people can achieve financial freedom by following a few basic rules. Thanks to all who wrote in, and here’s hoping that someone out there benefits from the ideas presented here.

My wife and I have been married over 40 years and we can’t remember the last time that we had a balance on our credit cards. Carrying a balance has to be one of the single biggest mistakes that people make.

– Fred B.

When I want to buy some creature comfort or gadget, I force myself to cut down on another expense. For example, I plan on buying an iPhone soon, so I decided that to pay for it I’m going to cancel my cable and my land line phone.

Getting rid of cable may sound harsh, but hey, all Canadian broadcasters just went digital, so between my antenna and high-speed Internet I can pretty much get anything I want entertainment-wise anyway, and with an iPhone who needs a land line? I’m not cheap – one of my bikes is worth $6,000 – I just like spending money on things I value.

– Lloyd D., Ottawa

Have your savings automatically withdrawn from your bank account every month into an RRSP or a savings/investment account, and live below your means.

Far too many North Americans feel they need to have the big house, all the gadgets and all of the latest consumables. As a result, most are in debt to achieve this lifestyle. I live a modest but very comfortable lifestyle and am no less happy than the majority of people.

– Genevieve L., Toronto

Make your life smaller. I moved to a downtown condo, got rid of my car (I rent when I need a vehicle), but kept my parking space as it’s an appreciating asset and rent it out for rising income. I have a public transit pass, which is tax deductible, and walk whenever I can. I shop with a cart on weekends and find many bargains at open air markets. We plan meals ahead of time and my family of three eats very well for less than $100 a week. Making small sacrifices like skipping the pub after work, having coffee at home in the morning and brown bagging it for lunch can reduce day-to-day expenses dramatically. We still vacation and dress well, yet we’ve been able to save more and reduce debt on a regular basis despite our incomes being pretty much stagnant.

– Alan C., Toronto

I personally make double mortgage payments. When I had to replace my car I bought an eight-year-old, low-mileage four-cylinder. No payments, cheap insurance and great on gas. In the summer I set the air conditioner at about 25 C and winter heat at 20 C. I live a comfortable life knowing my MasterCard balance is zero, my son’s education is paid for and he has no debt. On weekends, when I’m having a few beers or wine, I’m not stressing about the bills coming next week.

– John D., Stoney Point, Ont.

We follow my wife’s rule of acquisition when we need something: Identify what we want, and then ask, can we get it free? Can we get it used? Can we get it at a discount? We stick our change in a jar, and when it’s full, we put it on our mortgage. This adds up more significantly than you’d think, maybe $500 to $750 a year in change, incredibly. We also buy a lot of things with cash. You sort of tend to retain cash; there is that physical angst of seeing your twenties broken into fives and toonies that you don’t seem to get with debit cards.

– Marty B., Ottawa

I biked to and from work all year long and vacationed in the off-season. I always paid bills on time. A car purchase was made with a $10,000 down payment on Visa (resulting in points), which I repaid with cash, and a zero interest loan for the balance. I have a very comfortable retirement fund that I can use for daily and extraordinary expenses. In 2011 I have taken four vacations so far and next week I am going on a six-week vacation to Europe. In my eyes I deserve it and I intend to enjoy the fruits of my “frugality.”

– Peter G.

Live close enough to where you work, or work close enough to where you live, and you won’t need a car. Food-wise, don’t buy what you can make yourself. Only eat out on special occasions. Remember that most movies aren’t so great that you can’t wait for them to appear on DVD at the public library.

– Eric D., Victoria

Wednesday, September 14, 2011
JOHN HEINZL
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