If I had read that headline 10 years ago I would have assumed there was some sort of trick. It took a while, but I finally know better. There’s no trick, no bait-and-switch, no slight-of-hand. It’s real. Go figure. Oh, and if you prefer videos instead of text, scroll to the end.

Defining “Rich”

Before you call yourself rich, you need to know what “rich” is. When you imagine someone rich, what/who comes to mind? Do you think of a pop star buying mansions and sports cars? How about Warren Buffet in a modest home, but never having to worry about money? Do you think of your cousin’s friend’s sister who just retired at age 40? Get an image in your mind.

Now, what about a pop star who buys mansions and sports cars and then goes broke? Are they still rich? What about your cousin’s friend’s sister who retired and no longer has any income at all, but has $3,000,000 in the bank? Is she still rich?

Most of us would say the woman with $3,000,000 and no income is rich, while the pop star who just filed for bankruptcy isn’t. If that’s true, why is it true?

It’s true because being wealthy isn’t about what you earn, it’s about what you keep. Reread that a few more times, and let it sink in. It’s not about what you earn, it’s about what you keep.

How to Get “Rich”

If being rich isn’t about what you earn, it’s about what you keep, then the way to become rich is to keep a lot of money, right? How much money you need to keep to be “rich” will vary depending on your circumstances – your family size, where you live, and more. The thing is, you need to keep it.

Someone who earns $200,000 per year and spends $200,000 will never be rich, because they’ll never save anything, right? Sure, they go on fancy vacations and buy expensive jewelry, but they don’t have anything saved up for emergencies, for spontaneous fun, or to buy a house.

On the other hand, someone who earns $45,000 and saves $20,000 will eventually have some decent savings built up. They will be able to cover emergencies, indulge in spontaneous fun, and buy a house if they want to.

Because it’s not about what you earn, it’s about what you keep.

And as an added benefit, someone living on only $20,000 per year won’t need to save up very much in order to feel rich – $500,000 is enough to retire, according to the 4% rule. Someone spending $200,000 will need to save a whole lot more – $5,000,000!

How to Keep Your Money

If you’re finding it hard to keep your money, remember the old equation: you need to spend less than you earn and save the rest.

  1. Spend less. Review all of your spending from your last three debit and credit card statements, or, even better, review your expense tracking. What’s less important to you than becoming rich? Whatever it is, cut it out if you can. If you’re in debt, those interest payments really suck up your money, so pay off those debts as fast as you can. Do you have memberships you aren’t using? Cancel them. Do you spend more on food than you need to? Cut back. Make a list of changes and implement them.
  2. Earn. Try earning a bit more. You don’t need a high income, but every little extra bit helps. Babysit, walk dogs, sell stuff around your house, ask your boss for a raise. Make a list of ways to earn a bit more and implement them.
  3. Save the rest. Ah, here’s the tricky one. Take the savings from #1 and #2 and put it into a different bank account. If you tend to spend whatever is in your checking account, then get it out of there! It’s easy to buy a coffee here and a bagel there and suddenly your money is gone. Put it someplace where you can’t easily get to it, like investments or a savings account at a different bank than your checking account. Before you know it, that account will be growing!

Track It and Celebrate it

How much do you have right now? What’s your net worth (what you own minus what you owe)? If you’re not sure, use this calculator to find out:

I have actually spoken to people who were shocked to learn they already had their target wealth! If only they’d taken a moment to do the math, they would have known it years earlier. Others are far away, but closer than they thought. A lot of us (and definitely me too) tend to exaggerate for the worse. That’s why we need to know exactly what we’ve got. Knowing where you are means you know where you’re headed and you can change course if you need to.

Plus, knowing where are you are means you can keep tracking your progress and celebrate it! If your goal is to save $1,000,000, why not celebrate when you save your first $500? And your first $1000? And your first $10,000? As you continue, the milestones might stretch farther apart, but the excitement will only increase. Find ways to celebrate without spending that hard-earned money. Because you deserve it!

Take a Gander

If you’re on the Nest Egg Chick mailing list (and if you’re not but you want to be, just sign up at the top of this page) then you know about my recent talk at the super awesome Super You event! This was a free online event full of fantastic talks to empower women. The event is over, but the videos are still available when you join the group. My talk was on today’s post topic, keeping your money, so I’m including the video here. (This was a Facebook Live video, which is why I talk about “likes” and comments.) Enjoy! And if you’re curious about the challenge that I mention in the video, you can learn about it here.

If you’d like to start saving up towards your new wealth, consider joining my FREE email challenge, right here:

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