How come no matter how hard I work, I’m still broke? Why is it that I struggle to make it to each payday? How can I save money when I have nothing to save? These questions sound familiar? Well, they should if you are living from one pay day to another and have nothing to show for it in the form of savings.
What is wealth?
Wealth is not measured by how much money you bring home, how much you have in the bank, or by how many material items you own. Wealth is simply the amount of money you have left over each month after essential expenses are paid. The higher the ratio of income to expenses, the wealthier you are.
The process of becoming wealthy is effortless. You don’t need an educational degree in finance to know how to become wealthy. All you need to do is decrease unnecessary expenditures and save as much of your income as possible in a separate account. Take a close look at your expenditures and increase your wealth with these 10 tips.
1. Reanalyze your monthly financial fees
Many banking institutions charge fees for checking account balances, the number of checks you write in a month, and for using other bank’s ATM machines. Consider saving on fees by switching your banking to a local credit union or local bank where fees are minimal, and order personal designer checks, after all, you can’t lose your style, and it will be cheaper than purchasing through a bank.
You also need to stop using credit cards. Pay your existing credit cards on time to save on paying late fees, but don’t create larger balances. Begin to pay everything in cash, by debit card, or with a personal check.
2. Take a closer look at your monthly expenses
Really be honest here. Every time you buy something, whether it is a cup of coffee, or the car insurance bill, keep the receipt. Log each expense in your personal budget plan. This will allow you to really see where your money is being spent, and where you can cut back.
3. Simple lifestyle changes
Instead of purchasing that cup of coffee each morning, brew your own at home. Stop eating out. Cook enough dinner to allow for leftovers for the next night, and buy enough groceries to make lunches for you, spouse, and/or children.
Consider renting movies and watching it at home with some homemade popcorn. This will not only save you money, but it will still give you the sense that you are not being punished by being on a personal budget; you are just making different choices in having fun with family and friends.
4. Keep track of routine bill due dates
List all the due dates for your routine bill on a calendar that is visible all the time. This will ensure that you allow enough time to mail bill payments or make bill payments online, before the due dates. The last thing you want to accumulate is unnecessary late fees and fines. That is just money being thrown away.
5. Love your money and love your bills
Look at your personal budget as a means to wealth, and not as a means to deprive you of enjoying life. Love your money by respecting it, and don’t be afraid of bills. Bills will always be there. Cars will break down, appliances will deteriorate and need to be replaced, and children will always need that extra item for school. That’s life. Accept it. Just be thankful for what you have and be proud of you for taking steps each month to build financial wealth. The fact you need to accept is that it won’t happen overnight, but it will happen.
6. Be attentive to your expenditures
Ask yourself, is this purchase something I need, or is it something I want? Is it something that I will use or is it something that I think I will use? This is where you begin to notice and make a distinction between essential and non-essential purchases. If you already have 20 pairs of shoes in your closet, do you really need another pair? Probably not, right? Money well spent is money well earned.
7. Nothing wrong with being frugal
It doesn’t cost a dime to have fun or to take a moment out of this life to relax and unwind. Take a walk in the park or around the neighborhood and enjoy the beauty that surrounds you. Go to the beach and enjoy the sand in your toes and the sea breeze on your face. Much of the time we feel that if we are not spending money on a gym membership, or getting a massage, we are not relaxing and having fun. That is not true.
8. Set your financial goals
In addition to using your personal budget to keep on track with your spending, create a separate space for your savings. Besides seeing your debt decrease each month, you can see your savings increase each month. Set a goal of when you expect to be debt free and the amount of savings you want to reach. This will add to the good feelings you will gather when staying on target each month.
9. Do comparison shopping
Much comparison shopping can be performed online, or with your weekly newspaper fliers. Coupons are now readily available online, or in your local newspaper. Clipping these coupons, along with comparison shopping can increase your savings for routine purchases.
10. Eliminate impulsive buying habits
Develop a shopping list before entering a store. Having a plan and sticking to it will deter you from impulsive buying. Impulsive shopping usually happens while browsing a store. Don’t browse. Go into the store and purchase what is on your list and get out.
You will feel that a large weight has been lifted off your shoulders when you stick to your goals. Remember, the biggest enemy to you staying on track with your personal budget is using credit cards. Stick to using debit cards and using free shipping checks to save money. The only way to eliminate debt is to stay away from new debt.
The third article in this series will deal with building you a stable financial future.
About the Author: Residing in Minnesota, Joe Johnson has been active in online communities for over 15 years. He enjoys helping families and individuals understand the importance of personal finances, such as saving and budgeting money, by contributing articles to related online web sites.