| An old friend of mine is in a dire financial situation. It's not uncommon for him to tell me he may not be able to pay his rent. Over the past several decades, he's made terrible decision after terrible decision. It's not that he's made bad investments; it's that he's made no investments. He's literally spent every dime he's ever made. It's always a race to the end of the month to see whether his funds will last or he'll have to ask friends for cash. It's hard to find a worse example of how you should live your financial life. People who are financially successful are often no smarter, luckier, or more skillful than the rest of the population. What it usually comes down to is making disciplined decisions. I've written before about how learning the true power of compounding changed my life. I had always been a good saver, but understanding what compounding could do for me helped me strengthen my saving and turned me into an investor. I'm not exaggerating when I say it changed my life. From that day forward, I saved and invested hard, and it has made all the difference. It enabled me to send my kids to the schools of their dreams and has created a nice retirement nest egg for my wife and me. Admittedly, discipline is not fun - at least at the beginning. No one likes denying themselves some of the things they want. But what is fun is looking at your financial statements and seeing your situation improving year after year. Here are three quick but practical steps to making better financial decisions. 1. Live beneath your means. Just because you can buy that house or car doesn't mean you should. Now, if it's your dream house, go for it. You'll likely be spending many years there, and houses are usually appreciating assets. But if it's not your dream home, consider a cheaper alternative. Having a lower monthly payment on what is likely your biggest expense will add up to a lot more freedom down the road. Cars, on the other hand, depreciate the minute you drive them off the lot. Having a lower-cost car can make a big difference in your finances now and in the future. There are plenty of other ways to live beneath your means. That doesn't mean you have to buy cheap, poorly made garbage or never treat yourself, but making smarter decisions and investing the extra cash today will reap big rewards tomorrow. | 
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