Several years ago, an American admiral gave an inspiring speech in which he recounted crucial lessons he had learnt during his time in the US Navy.
Admiral William McRaven highlighted one particular lesson that he believed to be of utmost significance: how to make his bed.
“Every morning, we were required to make our bed to perfection,” he said.
“It seemed a little ridiculous the time. But the wisdom of this simple act has been proven to me many times over. If you make your bed every morning, you will have accomplished the first task of the day.”
His audience was a team of Navy Seals, who were preparing and learning to become warriors - and they were baffled by the need to make their beds.
Only later did they realise that it gave them a sense of pride and motivation to accomplish another task. And another.
His message spread like wildfire and it’s something that still resonates with me today.
But, like life in general, it’s the small, seemingly insignificant things we do, the things that become almost mundane in routine, that make the world of difference – like making your bed every morning.
While many investors are saving as consistently and systematically as they can, sometimes you can help your journey to a flourishing future by scrutinising your spending.
It’s questioning whether you really need to eat out three times a week, whether you need that new car or that new iPhone.
It’s not a glamorous task at all, but staying on top of your finances is something your future self will thank you for.
Elizabeth Warren, a distinguished bankruptcy expert from Harvard, concurs with this perspective. Additionally, she holds the position of a US Senator representing Massachusetts and has been recognised as one of the Top 100 Most Influential People in the World by Time magazine.
She coined the 50:30:20 rule for spending and saving, which is about allocating your income according to needs (50 per cent), wants (30 per cent) and savings and investments (20 per cent).
So, let’s say your take-home pay is Dh100,000 ($27,230) a month. Using the 50:30:20 rule, you should spend no more than Dh50,000 on your rent or mortgage, car payments, insurance premiums, groceries, and other life necessities; Dh30,000 on “wants” like clothing, eating out, socialising, gym membership and Dh20,000 on savings and investments.
What’s interesting about this practice is that you’ll be able to see where you’re overspending or how you’re prioritising certain financial obligations.
You can use it whether you’re young or old, a high- or middle-income earner, and anywhere in the world.
Of course, life can never be so cut and dry, and rules are flexible. Many of us may need to adjust according to our own lifestyles.
However, when people look to reduce costs, it’s interesting to see many would cut back on the 30 per cent category (wants) or even the 20 per cent (savings and investments), instead of the bigger percentage of “needs”, which goes towards our house and often, car.
Of course, if you’re already putting enough away and have a good amount of disposable income, there’s no reason for you change where you live.
Where we choose to live also has a lot to do with where we work and where our children go to school.
Life is a series of trade-offs. I’ve said this many times before; some of the world’s millionaires are known to live below their means.
Let’s look at cars. The three most popular car brands among American millionaires are Toyota, Honda and Ford.
As for billionaires? As Andrew Hallam explains in his book Balance, nine of the 17 richest people in the world drive cars worth less than $50,000. Amazon's billionaire founder Jeff Bezos drives a Honda Accord.
If they’ve managed to avoid the temptation to overspend, you certainly can, too.
It just takes focus, self-control and support from the right people. It’s about behaving yourself to wealth.
Sam Instone is co-chief executive of wealth management company AES