Be Richer: Spend, spend, spend? Now stop, stop, stop!

Saving money may be the hardest one of all. But Jasmine Birtles knows how you can do it
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The Independent Online

First of all, work out what kind of riches you are aiming for. Unless you go the traditional route and inherit it, making serious money will involve some sort of sacrifice. So decide what really constitutes riches for you. Is it just money or is it freedom, friends and lots of leisure? If money doesn't do it for you, then don't waste time and energy working to make the cash. Always follow what you love and you'll never be really poor.

However, even if you are just aiming at a decent standard of living, resolve to stop wasting money this year. If you want to be rich, or just well-off, studies have shown that the amount you spend is more important than the amount you earn. Even if you make millions, if you spend more than you earn, you will have financial problems.

1 Pay off all debts, including your mortgage, as fast as possible. Start with the ones with the highest interest rates (probably store cards and credit cards) and keep on until they're all paid off. Aim to pay off your mortgage well before the standard 25 years. Not only does it give you freedom from a huge burden early on, but you save more interest than you would make in a cash account, and it is tax free.

2 Cut all costs. Save thousands by switching your mortgage to a better rate and hundreds by switching utilities. Use websites such as www.uswitch.com, www.buy.com and www.moneysavingexpert.com to find cheaper versions.

3Don't go shopping. Large shops, and particularly supermarkets, have increasingly sophisticated ways of making you buy things you don't need and can't afford. Shop in markets (30 per cent cheaper than supermarkets) and online, where you will be less tempted by impulse-buy offers.

4 Look after the pennies. It really is true that cutting back on small things will help build up money long-term. For example, buy a couple of lattes each day at work and you can kiss goodbye to around £25 a week, which equals £1,250 a year.

5 Invest regularly and wisely. You don't even have to invest large amounts. Take the above example. If you cut out your daily lattes and invest that money instead in a stock market fund over your average working life of 40 years, you could retire with more than £400,000.

Throwing all your spare money at your mortgage each month is an easy, risk-free investment that can save (in other words, make) you tens of thousands of pounds.

Never invest in anything that you don't understand or is advertised on TV, pressed on you by your bank, recommended by a financial "adviser" who you haven't paid (this sort call themselves advisers, but they're really just salespeople) or so complicated you feel you need a degree in economics to work it out.

6 Be different. Most people lose money by following the crowd when they invest (think of the dot.com bubble and recent property hysteria). Be like top investor Warren Buffett, the second-richest man in the world, who has made his $44bn personal fortune by making his own investment decisions through thorough research.

7 Marry and/or divorce well. According to Datamonitor, there are now more rich women than rich men in the UK, and many have done it through impressive divorce settlements.

8 Run a successful business or do something creative that is highly popular. Certainly, you could make millions doing something you love, as J K Rowling, David Beckham, Rod Stewart and Steven Spielberg (to name a few) have. The richest people in the world, though, have made it through constant hard work building up (or continuing) a business in telecoms, manufacturing, technology, retail, hotels and the like.

9 Hang around with poor people. We tend to rate our level of happiness and wealth by comparing ourselves to others. So, surround yourself with people who have less than you do.

10 Realise that you are already rich. Check www.channel4.com/4money/funnymoney/richometer to see where you rank. You'll be surprised - for example, if you earn £35,000 or more, you are in the top 1 per cent of the world.

Nell McAndrew, MODEL

I always get really excited at this time of year because it's a time of fresh starts. This year, it's quite a big change for me as I'm planning to train to qualify as a personal trainer. I've already made three fitness videos, but I really wanted to train properly and do something mentally stimulating. I've been meaning to do it for a while but it's very difficult fitting it in around work, so I've decided this January is the perfect moment to start. I'm getting to that stage in my life, as I get older, where I want to do what I love. I'd like to learn a new language as well, but that may have to wait until another year. I'd also like to cook more in the coming year. My husband's a great cook, but I would like to make myself cook more. It's been difficult to cook recently as I spend a lot of time commuting. I always have big clear-outs at this time of year. It's the perfect time to start afresh.

Mat Fraser, ACTOR AND MUSICIAN

What I want to do is use my time more constructively. I don't want to dissolve into self-abuse and I don't want to watch pointless telly. Which probably means I don't want to watch any telly, as it's all pretty pointless isn't it? That's it, you see - I also need to get a more positive outlook in 2006. I need to buy less marijuana and start doing yoga instead. I need to get broadband and learn how to use my [AppleMac] G4. I need to reconnect with schoolfriends. And I really need to practise my tap dance and salsa so I can be a funky machine when my show Thalidomide! A Musical comes to the Battersea Arts Centre in London in February.

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