Discover 5 simple ways to build 7 figures.
By Anya Kamenetz



Financial gurus annoy us. Forgo your daily latte, they tell you, and that $4 a day, compounded over 20 years at 8 percent interest, will grow into $70,000. Fine, but what about this: You like latte. If you were to apply their advice to every aspect of your life, you'd live at the Y, hitchhike to work, and eat three squares of wheat bread a day. And forget sex: Each 12-pack of Trojans you buy now would be worth $173 at retirement.

Our point? Their advice may help you save, but it won't help you live. And besides, it's not necessary. Retiring rich isn't that difficult. You simply need to recognise your spending strengths and weaknesses, and learn how to exploit the former while suppressing the latter.

And, actually, you don't even need to worry about the learning part, because we have your lessons right here. We polled 1,600 visitors to the Men's Health web site about their spending habits and financial priorities. Then we asked a handful of money experts for their best no-hassle tips - simple ways to save more without denying yourself the things that make life worth living. Their advice is universal, but how you execute it depends on the type of spender you are. To figure that out, take this one-question self-test.

Think, don't look

How much cash do you have in your wallet right now?
A. Could be $100, could be $3. I don't really know.
B. $200 or more in crisp new 20s and 50s.
C. One emergency 20, folded up and stuck in the credit-card slot.

If you answered A, you're a Sleepwalker. You spend on impulse for big and small stuff alike, never thinking about your budget. At the end of the month, you wonder where it all went. Everyone has a little bit of Sleepwalker in them - that's why crafty marketing experts put chocolate bars at the checkout. But a bad case of Sleepwalker can mean overdue bills and falling short of long-term financial goals without even realising it.

If you answered B, you're a Status Spender. You may be in a commission-based profession like real estate, sales, or finance. Regardless, you're living large and want friends, colleagues, and ladies to know it - new cars, expensive dinners, the latest tech. The danger, of course, comes when your lifestyle inevitably outruns your paycheque.

If you answered C, you're a Scrimper, with a tight lock on your finances. You probably think you don't need our advice, but scrimping has two major downsides. First, you could be denying yourself the pleasures of a job well done, which sets you up for occasional binge spending. Second, you may not be able to part with a large chunk of change, even when it's a wise investment.



Now, here's what to do.

1. Create a personal expense account

Seventy per cent of you have a savings account, but less than half of you use it. This wouldn't be a criminal offence, except that almost 30 per cent of you regularly pay overdraft or late fees, because you don't have enough money in your account to pay your bills on time, every time. The solution: Open a cheque account just for household expenses, preferably one that allows you to avoid monthly service fees by maintaining a minimum balance; say, $2000. Next, figure out roughly how much your monthly expenses - everything from electricity to entertainment - should run to, and direct-deposit that much into the account from your paycheque. Put the rest of your paycheque into your savings account and let it accumulate until you need it (see #8, below). Not only have you just taken the guesswork out of saving, but you've also created a budget without the hassle of doing a monthly line-by-line accounting of what you've spent. If you have $2,100 left in your cheque account at the end of one month, spend the extra $100 the next. If you have $1,900 left, cut back on expenses the following month.

Sleepwalkers Pay your bills online - it's quicker, and you can set up automatic payments for all recurring expenses. "Often, [Sleepwalkers] aren't late because they don't have the money," says financial counsellor Judy Lawrence, author of The Budget Kit (Kaplan, $35). "They just don't make the time."

Status Spenders Forget online banking and take the time to balance your chequebook the old-fashioned way. It'll make you more aware of what you're spending each month.

Scrimpers You're going to be tempted to start building a balance in your cheque account. Resist. "You've set your budget, and you know how much is okay to spend," says Lawrence. So spend it.

2. Go to the ATM once a week, no more

Thirty per cent of you say you make most everyday purchases with cash, while 50 per cent of you use a debit card. Some financial experts favour cash, others prefer plastic, but all agree that visiting the ATM more than once a week is a red flag. This takes some planning and discipline. "If I have $40 in my wallet," says certified financial planner Mike Furois, "it's easy to spend $35 in two days and hang on to the other $5 for a week."

Sleepwalkers Limiting ATM visits is especially important for you. Take out the same amount each week - preferably no more than $100 - and force yourself to make it last.

Status Spenders Don't carry more than $200 at a time. "Some of my clients never have less than $500 in their wallets," Furois says. "I try to get them to cut back gradually, so they don't blow hundreds of dollars at once."

Scrimpers Split your weekly withdrawal into envelopes marked "groceries," "petrol," and so on. If you have any left over come Saturday, go out for a guilt-free dinner or movie.

3. Postpone gadget purchases for 3 months

The electronics store is the place guys are most likely to spend more than they intend, according to 59 per cent of you. In fact, almost half of you say that if your TV broke next week, you'd instantly replace it with a $1,500 or even $5,000 flat-screen or plasma version. That's a lot of money to spend hastily. Hence, our three-month moratorium.

Sleepwalkers Don't even walk into Harvey Norman until you've decided what you want and it's time to make your purchase. Lawrence knows your type. "One of my clients, a guy in his 20s, goes into the electronics store to comparison-shop. But once he's there, he can't help himself and spends far more than he can afford."

Status Spenders Use the time to do background research, compare features, and, most important, save enough to pay in cash. If your friends ask about the delay, tell them you're just waiting for the next iProduct.

Scrimpers Save a little extra so you can purchase a better-quality product - it'll last longer and work better than that cheap knock-off you've been eyeing.

4. Make every third date cheap, free, or dutch

Ah, romance. You can't put a price on it, but it costs you dearly. Seventy-seven per cent of you say you almost always pay, with half of you typically dropping $150 or more on a big date. Seven per cent say it's not unusual to spend $500 if you're really into her. We're not suggesting you become miserly, just that you mix it up. A run in the park can end happily, too.

Sleepwalkers Set up a regular, low-cost date with your girl: coffee and the paper at her place on Sundays, perhaps.

Status Spenders Swear off gifts and expensive dates ($200 or more) for the first three months of any new relationship, or at least until you know you're serious about her, recommends certified financial planner Dean Harman.

Scrimpers Both working late? Take her out for dessert (not dinner) at a nice restaurant afterward. She'll think it's neat, not cheap.

5. Keep the big prize in sight

What are you saving for? A house? A car? A dream holiday? Early retirement? "Figure out how you want to reward yourself in the future," says Kahan. "Then work backward. How will you get there?"

Sleepwalkers Pick a five-year goal - far enough out to force you to think beyond the short term, but not so far that you'll forget about it by next month. Next, create annual yardsticks with which to measure success. To strengthen your resolve, make a small investment this year. Saving for a motorcycle? Buy a helmet and take lessons.

Status Spenders Set a 20-year goal. Why? "One year you might make $150,000," says Furois, "and you think you'll always have that kind of money." Setting a long-term goal, one that you can achieve whether you make $75,000 or $150,000, will keep you focused on building wealth.

Scrimpers Reward your discipline. Even if you already have a long-term goal, give back to yourself each year - if not a holiday, then something useful, like a new lawn mower. Or, even better, a lawn-mowing service. Irresponsible? Maybe, but you deserve it.

Let us know what you are saving for: