There is a reason why wealthy men are able to save, invest, and still have money for fun while the rest are doomed to a life of scarcity. They know the secret to staying out of debt, but somehow they are able to live a lifestyle of luxury and abundance beyond their wildest dreams
Most people relate financial responsibility with a life of limit and want, but the truth is that once you master some basic principles you will be able to pay your bills, save some cash and still have some fun…
Secret #1 – Pay Yourself first.
The first check you write should have your name on it. Decide the amount of money you can feel comfortable with and deposit it on a separate account. You must do this even if you can’t afford it and be consistent.
Try to save between 15% and 20% of your income. But if it’s too much for you, don’t worry, just save any amount you can bank consistently. Your will be able to save a lot more once your finances are in balance.
Secret #2 – Save $1000 first
Your first goal is to save $1000, that is an achievable number, isn’t it?
This money will be on your regular account ready for an emergency, and will help you avoid using your credit card, in case you need it. It will also help you avoid bounced checks in case a deposit clears one day to late.
You can use this money if you need to, that’s what it’s there for, but you must repay it as soon as you can.
Secret #3 – Pay your credit card debts
Once you have saved your initial $1000 all the money you save should be used to pay your credit cards. Think about this:
On average people in the U.S.A. spend between 5% and 12% of their income on credit card interests. That number is much bigger in many cases. Just by paying your card’s debt your income will raise more than 10%.
If you have more than one card pay the minimum on all cards and use the rest of the money to pay as much as you can on one of them. This will have the snowball effect and you will advance much faster once your previous card is totally paid.
Secret #4 – Let your money work for you
Once your credit card is paid you need to find the best place to allocate the money you save. The bank usually isn’t the best place to hold your money. With the inflation and all that, you are losing buying power everyday your cash sits down there.
I personally invest my money on the stock market, but I understand this alternative is not for everyone. Find a place and a system that works for you and put your money to work.
Secret #5 – Spend some money on yourself
This last step is crucial. Separate an amount from you income: between 15% and 30% and go nuts with it. This money is yours do whatever you want with it; spend it as you wish. But once it’s gone it’s gone.
This money will help you stay disciplined and will allow you to put your finances in balance much faster and easier.
You may be wondering how will I be able to separate that much money for myself? Well, limit your needs to 50% of your income. The things you must pay every month no matter what should be limited to 50% of your income. Try to avoid long-term contracts.
Remember our goal is balance, once you have your personal finances in order wealth is the natural path.
Transform your wealth thinking and any actions towards financial independence will follow effortlessly. Today I have a life of choice and freedom beyond my wildest dreams. And although I’d love to claim I did it all myself, the truth is that there were a few courses I bought which were KEY to getting there.
I’ve bought dozens and dozens of courses, but far and away the best one was “The Money In Your Mind” by self made millionaire Igor-Alexander Ledochowski training program. It absolutely blew my mind – and got me far better results than anything I tried before.