How to experience the joy of financial stability

2. Cigarettes. There’s no kind way to say this: if you smoke, you’re an idiot. I was once an idiot, too, by the way. But I quit when the price of a pack of cigarettes was inching closer and closer to an astonishing $1.00. One dollar! That’s way too much. I just couldn’t justify paying that much to slowly kill myself. While it’s wisest never to start, if you find you’re hooked, get help as soon as possible. You’ve just carved a path from your wallet directly into tobacco executives’ bank accounts. I’ve met some of these guys. Guess what? They don’t smoke! If you refuse to quit, you should be putting an equivalent of what you spend on cigarettes into your Catastrophe Cash account. You’re going to need it when you get sick and can no longer work and your children haven’t saved enough to bury you properly. Sorry to be grim, but you know it’s true.

3. Coffee/lunches. Speaking of moronic, it never fails to amaze me when I see young interns and assistants spending $25 a day on fancy coffees and lunches, when I know it took them the better part of the morning to earn it. So I can’t stress this enough: take the time and put in the effort to make your own coffee and lunches at home! Invest in a thermos, a vinyl lunch bag and a good coffee maker. Because I’m not exaggerating when I say this: lunch and coffee spending are the kind of insidious, daily expenditures that erode wealth and can affect your quality of life down the road.

There is always a cheaper way to enjoy your life, one that won’t take away any of the pleasures and won’t create more financial pain down the line. In fact, being frugal increases your sense of economic security and overall quality of life. That’s the only way to experience the kind of joy only truly financially stable people get to feel. You can take this a step further. After becoming keenly aware of the Ghost Money you’re creating and pledging to stop creating more, put that money you saved back into a Ghost Money fund. A year of no longer smoking a pack a day of cigarettes could add up to almost $4,000. Change is so much easier to institute when you can see the results.

Excerpted from The Cold Hard Truth About Men, Women and Money by Kevin O’Leary Copyright © 2012 by Kevin O’Leary. Cover photograph copyright © 2012 by Kathryn Hollinrake, Excerpted by permission of Doubleday Books, a division of Random House of Canada Limited. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.