Money Doesn’t Grow on Trees
Money grows in investments, paying debts, and careful management. Don’t count on winning the lottery; you are more likely to be struck by lightening*. And waiting for an inheritance could be a long and fruitless wait. Nope. It’s time to face the truth that the only way you are going to get ahead financially is through hard work and commitment.
First of all, let’s talk about what’s possible. You can pay off all your debts, clean up your credit, and have a comfortable retirement. Easy for me to say right? Wrong. I have learned the hard way, through blood, sweat and tears, what it takes to get ahead financially. And I am just an average guy who got fed up scraping by year to year.
So how can you grow your money? Stop spending it. I mean it. Quit buying crap that is consumed or forgotten in minutes. Kick starbucks to the curb, significantly adjust your discretionary spending (stuff you don’t have to have), and it will be like putting extra cash in your pocket. Every dollar saved, is a dollar earned.*
In order to get a real idea of what you buy that you don’t need, or where you overspend, you will need to start tracking all of your expenses. Even the pack of gum at the gas station, or the 3 lottery tickets on a whim. Sure it’s a pain in the butt, and I guarantee it is the start of transforming your financial future. Write everything down for a month.
Pay yourself first. This is the key to investing, saving, and being wealthy. These days the best means of paying yourself first is by utilizing an auto deduct program. (I use ING.com) If we don’t have money in our hands, we are less likely to spend it. Think of it this way. If you made a thousand more per month, you would quickly find a way to spend that thousand each month. The opposite is true. Make less money, and you will find a way to function with less. So start paying yourself first, this is the golden rule of accumulating wealth.
You do these three things:
- Cut back on discretionary spending
- Create a financial accountability diary
- Pay yourself first
You will start to make a serious dent in your debt and in creating a healthy financial future. It starts with a commitment. You must choose to be responsible for your finances and you need to give yourself permission to be wealthy. It doesn’t happen just because you want it to, it happens because you make it happen. It won’t be easy, and it will be worth it.
Next time I’ll talk more about investing and improving your credit.
*odds of being struck by lightening in US, approx 1 in 4.5 million. Odds of winning the lottery, 1 in 100 million.
* a paraphrase of Benjamin Franklin
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