Life has a way of throwing unexpected curve balls. One day we might think our future is secured. The next day, we wake up facing a major catastrophe that changes everything.

There is no way for us to guarantee our future is going to look a certain way.

Creating a solid financial foundation and limiting financial waste helps prepare us for what the future might bring. It increases our chances of reaching our goals and creating a life that optimizes fulfillment and freedom. And that my friends, is the main reason we should be pursuing building wealth and financial freedom.

Getting comfortable and lax about our finances while things are going good tends to make it easier to waste our hard earned income. This not only can lead to wasting money but also losing time that we can't get back.

What Can Work Against Us

Even when things are going well, our habits and how we spend money could ultimately lead to financial disasters in the future.

For example, let's assume we are looking at a person named Joe. Joe is generally doing well financially. He makes a six-figure income, has no revolving credit card debt and has an emergency fund. He has made some excellent financial decisions. But Joe has a few negative tendencies that could change everything.

Lifestyle Inflation

Everytime Joe gets a raise, he increases his discretionary spending. Since he feels secure with where he is at, he doesn't have a problem spending extensive amounts of money on things that don't give him value. As his income increases, it becomes easier to overspend money.

The problem is he doesn't think about the details of his spending. He is not intentional about how he spends his income. Over time, he wastes massive amounts of money.

The more money Joe makes, the more money Joe wastes.

Not Aggressively Saving

When you aren't concerned about the future, saving for retirement and investing your money becomes an after-thought. Why would you want to aggressively save money every month when things are going well?

The issue is Joe is not thinking enough about the future. He is caught up with where he is at now and is not aware of how easy his situation could change.

The more money we can save, the easier it becomes to have that money make more money and create more options for our future.

The Future is Ignored

The fact of the matter is Joe doesn't spend time thinking about his future. He made some great decisions in avoiding credit card debt and building an emergency fund, but that tenacity didn't carry over into thinking about where he wants to be in 5, 10, and 20 years down the road.

If you aren't thinking about the future, chances are you aren't going to be satisfied with where you end up.

When we stop and think about, all of us can come up with things that we would like to do if we had the flexibility with our time to pursue.

Not Being Self-Aware

Joe doesn't spend much time thinking about his finances. He lives life like a roulette wheel, hoping things will work out.

When you aren't thinking about your past mistakes, even if you are well off, reduces the chances that you will avoid those same mistakes going forward. Self-awareness is like shining a light in a dark room. It reveals things that are not obvious.

How to Not Be Like Joe

If you are like Joe and have the following, you have a strong financial foundation:

  • No revolving credit card balances.
  • Fully funded emergency fund.
  • High-income earner.

But at this stage, it is not the time to get financially lazy. You don't know how long the good times will last. Maybe they will last the remainder of your career. Or maybe you wake up tomorrow without a job.

To not waste money and avoid the situation Joe is in, we should create an environment that helps us spend our money wisely. There are a few ways we can do this.

Define Your Future

The first step is to think about how you want your future to look. Do you want to be working a 9-5 job indefinitely? Or would you like to do some world traveling?

Thinking about the future forces us to prioritize what is most important to us.

Give Every Dollar a Job

Having a clear idea in how you are spending, gives you full control to have your money work towards your future. Instead of having money come out of your account based on your random purchases, you become more intentional with your spending. You manage your money budgeting.

Every dollar we bring in needs to have a specific task. I like to use YNAB because it makes it easy to categorize how income is spent every month, and we can easily keep track of our saving and spending goals. Being able to see past spending habits is invaluable.

Pretend Your Budget is Tight

When you “feel” like you are rich, this tends to make wasting money easier.

If I could technically “afford” to spend $2,000/month on groceries, it doesn't mean that is a smart financial move. I'm not saying that anyone can tell you how much you can or can't spend on anything; how we spend money is our decision. But when I waste money, the only person I am hurting is myself. Which is why intentionally limiting how much we spend on certain categories is a wise financial decision.

Being disciplined and knowledgable about how we spend our income cannot be undervalued. People who have a substantial net worth are usually not hyper-consumers.

Aggressively Saving

Saving for our future is vital for financial success. As they say, money doesn't grow on trees. If you are a high-income earner but spend 100% of what you make, you are not wealthy.

It isn't just about saving money. It becomes about investing in tomorrow. Even if we aren't 100% sure about how we want the future to look, saving money every month opens up future options.

Avoid Wasting Money

Understanding that no matter how much money you earn or have saved, it is never okay to waste money.

Would you ever take a stack of $100 bills and light it on fire? No! But that is precisely what we do when we waste money.

In most cases, only you can determine what is considered waste. But here are a few questions that are worth asking yourself:

  • How much and how often are you buying new electronics?
  • Do you have “stuff” collecting dust in the garage or basement?
  • Are you buying anything to make yourself look good? Examples might include luxury cars, expensive/large houses, etc.
  • Are you overpaying for things that you could get cheaper?
  • If you had to get rid of 100% of your belongings, what would you own and use? Thinking this through can help determine what is most important and what gives you the most value.

And it isn't just about wasting money. It is about how we are spending our time as well. It can be interesting to think about how we spend money on things that are not healthy or end up wasting time.

Think About Your Past

Ignoring past decisions and what has worked or not worked limits how much we can learn from our previous financial choices. Not being self-aware will ultimately hurt your chances of not making the same mistakes.

The key is understanding the smart and bad choices that got you to where you are at now. You want to focus equally on what has and has not worked up to that point.

It isn't about feeling guilty about our past, but being aware of what happened so we can change our future.


Joe might be a kind, generous human being. But he is burning through valuable time because he is ignorant about how he spends his money. He doesn't think about the future, and money leaves his bank account like dust in the wind.

Being wise in how we spend and save money can open up our future options. Maybe things will continue to go well for Joe, but he can't depend on that. By being defensive with how he looks at his money, he can increase the chance of reaching his long-term financial goals.

If you are doing well financially, what steps have you taken to avoid wasting money?