Many years ago, I read Thomas Stanley’s book, The Millionaire Next Door. A major point of the book was that the person who is financially successful is often not the person you think. They don’t drive the newest cars, live in most expensive “gated” neighborhoods, or eat at the fanciest restaurants. Instead, they live simple lives and get rich “slowly.” While “winning” by chasing the latest investment fad can give you something to brag about, it is a low probability outcome and a game not worth playing.
The Millionaire Next Door method is a much higher probability strategy. But, while it is simple, it is certainly not easy. It required diligence and impulse control. One of the main characteristics of The Millionaire Next Door was that they kept up with the income, expenses, and net worth.
Anyone looking to replicate this successful process is encouraged to do the same. While this can all be done with simple spreadsheets and calculators, the good news is it is so much easier today. With the introduction of online tools for budgeting, not only is it easier, but more fun and provides psychological encouragement. Most have automatic downloads from your financial institutions which makes what was once a tedious and time-consuming task quite easy.
To make them most useful, you’ll still need to “tend the garden” by setting up realistic budgets and spending goals and categorizing income and expenses properly.
There are many applications and online tools to choose from. If you don’t mind advertising and sales “pitches” from partner companies, mint.com from Intuit is easy to use and quick to set up. If you want something more robust and to track investments, Quicken has been a leader for years.
Recently, Nerdwallet.com provided a ranking of online budget tools based on their methodology: nerdwallet.com/article/finance/best-budget-apps.
Whatever you choose, the key is consistency and ease of use. While you want to budget your finances, you should also “budget” time once a week to keep your data accurate and clean. Fortunately, with these new tools, this time “budget” won’t break the bank and the millionaire next door will be proud!
For those interested in exploring personal finance and budgeting further:
Check out my book, The Money and Meaning Journey, which offers a fresh perspective on how to approach these topics—focusing not just on the numbers, but on the deeper meaning and purpose behind your financial goals. You can buy the book from any major retailer, including Amazon: bit.ly/41AxbgS.
In addition, I host a podcast, The Money and Meaning Show, which you can find on most podcast apps: https://link.chtbl.com/MoneyandMeaningShow
Disclosures: bit.ly/3MbScI5