After using multiple resources throughout my journey so far and discovering what exactly it takes to gain financial freedom, I have consistently noticed some general, but key points that allows someone to accumulate wealth. The four main keys are as follows:
1. Track your spending better. Need I say more? We all know how easy it is to spend money and how easily money can slip out of our hands. We also know how easy it is to ignore tracking our spending. However, if you want to get ahead pass less than satisfying financial situations, then you have to learn how to track your spending better. What's a simple way to start out doing this? Carry a mini notepad with you and retain your receipts. If you are "new fashioned", a notepad application on your phone will suffice. The strategy here is to track EVERY purchase that you make during a period of time, including those purchases that you make without getting a receipt. Take one week, then one month at a time. For a week, you will have your notepad on hand inputting the purchases that you make throughout that week. At the end of the week, you will then have a list of the individual amounts that you have spent and what each purchases was for. Do this for month or two and you will definitely see your current spending trends. You will want to keep track of the dates to correspond with your spending as well.
This clarity of specifically where all of your money is going will give you the means to evaluate and start making any necessary modifications that need to be made when it comes to your spending. It can help shed light on some unnecessary habits and also help you to rearrange your spending priorities. You might decide to use better spending methods, such as using your bank's ATM instead of others to avoid high ATM fees. You might notice that a lot of your purchases are sporadic and try to become less of an impulse spender.
You might even notice that you spend much of your money soon after you get paid, and decide to take more time thinking about where you would like your money to go, or where it should be going. You might notice that you pay everyone else but yourself and decide to give yourself a certain amount before you pay others from now on, and start a savings. The list of modifications that you might decide to make just from tracking your spending can go on and on depending on how aware and creative you become. The point is that the documentation of your spending gives you a starting point to actively tackle your finances and start gaining control. Immediately, and if not, eventually, you will see substantial results from the right combination of changes to your spending habits.
2. Manage your debt better. The first major part of this key point is to acknowledge your debt in the first place. The worst thing you can do is to ignore your debt and think it will magically disappear without you even pointing a wand. There is absolutely no way that your debt will go away unless you find ways to make it go away. After you take notice to your debt, then you can start to manage it. You might relate your debt to a fear. In this case, think of how you can get over a fear the more you face it. Getting pass the worries of how your debt can ruin things for you will allow you to get to the point of thinking of how to get rid of it. Once you accept that it's there, and accept that the only way it's going to be removed is if you do something about it, then you can start planning. You want to plan how to manage your debt. Ask yourself these questions in order to determine what area of your debt you want to tackle first...because you're going to have to start somewhere!
To whom all do you own debt to? What is the rank of importance that each of these creditors have? What are the amounts for each debt? What goals are any of these debts prohibiting you from reaching? Of these goals, which are most important to you? Can any of these debts be a cause for any of your assets to be seized from you? Although I strongly recommend customizing a debt tackling plan that will benefit you personally in the best way, protect your necessities such as food and shelter, and cater to your peace of mind, I also recommend that you go to my website listed below, and view this article there to get a link to an "Order of Debt Payment" document to see the order in which you should pay your debt according to the National Consumer Law Center. Some things you should remember are:
STAY AS STRESS FREE AS POSSIBLE Trust me, I know how it feels to have debt that seems to be over your head and even stumping you into the ground. I know that feeling of having a worry that doesn't go away because you just don't even know where to begin, so it seems like it will be there forever...and that can be a depressing feeling. However, as long as you allow yourself to be full of worry, then you will never figure out where to begin! A clear and positive mind is the way to let answers in. It will take work on your part to research and seek information that will help you in anyway. On the contrary, with a head full of worry, you will not even be able to develop the questions you need to ask, let alone the answers you need.
Remember becoming debt-free is very POSSIBLE There are people in this country who have crushed even millions of dollars in debt that that they once had simply because they had the will and developed massive action plans.
Stay on top of your goals every day It took me nearly a year to finally derive some clearly defined and definite goals from my "dreams". When you focus on what you want and what you desire, you can develop goals. When you focus on your goals ever day you can develop plans. When you have a plan, the rest is history.
You are not in it alone! Give me a break! The whole country is in debt! Literally! No wonder its children (us) are suffering. The apple doesn't fall from the tree! This is the initial comforting part; that you are not some freak of nature because you are broke. Don't think for a moment that someone's income determines whether they are wealthy or not, their net worth does. While most of the nation may be driving in fancy cars, they have also driven themselves into a financial mess of uncontrollable debt. Your goal from here should be to be the smart one in the bunch from now on; aim to buy that nice car with cash for half the price, never having to worry about any payments, and move on with your high quality life debt free! The bottom line is you are not alone at the bottom, so don't beat yourself up. Now you can stop being distracted from the false intimidation and make your way to the top!
3. Save more. Save, save, save... and save! Most people spend money because they have money. Makes sense, right? Wrong? Money's purpose is a bit more broader than that. Not only can you spend money, but you can save it, invest it, and multiply it! Spending money is fine, but, again, your spending habits are important to have under control. In other words, what you spend your money on and how much you spend is totally up to you! I definitely agree with people having their own and complete say as to where their money goes. However, in terms of getting the most out of your finances, are the things you are spending your money on and the amount of money you are spending proving to be the most beneficial to you and your life, or is it hurting you? Is it in a healthy proportion to the amount of money you are saving and is it cohesive with the financial future that you want. These things make a big difference. When it comes to spending, many people are spending not only too much of the money that they make compared to their net worth and how much they are saving, but they are also spending money that they don't have on top of that! This then is increasing their debt to credit standing while they accumulate more "IOU"s. If this sounds like you, then you are on the wrong side of the money game. How much are you spending and how much are you saving? If the answer doesn't make you proud then that means you need to be saving more.
If you are wondering, "Well, how can I start saving now? I'm already over my head paying for everything now. I have no money to save!" If you are asking these questions then your first step is to go over key point #1. Master this key point and you will find money. Instead of taking that money and finding somewhere to spend again, find somewhere to save it! At this point you can not be consumed in all of the debt you may have, you have to focus on how to raise your means to pay off the debt. When you learn how to sacrifice a purchase for the benefit of saving, then you learn how to sacrifice a purchase for the benefit of paying off debt. Ideally, you want to be able to be do both; save as well as get rid of your debt. However, I know that this might not even seem feasible to some people's current situation. The good news is it's OK if you want to choose to just go for tackling your debt. Why? If you keep going for it, eventually you wont have to go for it anymore and you can then start putting that money towards your savings, and you will already have a controlled habit developed! You have to agree that some starting point is better than nothing. The fastest way to find that mystery money to start paying off your debt is to cut spending.
The second fasted way is to increase your earnings... this is where your own ambition and work will come into play. You other option...and, a good one, that will aid you in acquiring your saving responsibility sooner than later is investing.
Start investing to get your money working for you. This is a good way to get a savings going on autopilot while you are concentrating on your debt. In fact, I would recommend going ahead and choosing at least one source of investing that will compound your money continually throughout the year. This way you can at least truthfully say that your savings is growing all while you are pinching away at your debt. Lastly, you might ask, "Why should I save in the first place? Why bother?" I have two good answers to that; to have an emergency fund and to have a future financial cushion. 4. Learn how to make smart investment decisions that can add to your savings. The term investing is very general. When it comes to investing, there are many types, and many places where you can invest. Here are some of the common places where you can invest money for gained interest:
Bank Savings
Certificate of Deposit Account
Money Market Mutual Funds
Stock Mutual Funds
Bond Mutual Funds
Balanced Mutual Funds
Specialty Mutual Funds
Foreign Mutual Funds
Global Mutual Funds
Individual Stocks
Individual Bonds
Retirement Funds
IRAs
401(k)
Keogh Plan
Real Estate Other alternative investments (e.g. art, antiques, etc) You need to learn entailment's of the different types of investment options such as interest rates, tax deductibles, withdrawal penalties and taxes, contribution limits, risk factors, are you going to hold your stocks through a transfer agency, dividends, and the list can go on. You will need to practice determining a strategy of investing that will suite you best. For instance, if you had to choose where to put a nice savings of cash that you've accumulated in order for it to get the benefits of compounding, you would definitely want to consider a comparison of interest rates amongst places to invest because your main objective is to get your money to increase the most.
At this point, you might be saying, "I don't want to deal with all of that! It's too complicated!" If you want to take full control of your finances and make your money work hard for you, then in the beginning, you are going to have to work hard for it, and that means you will have your share of studying and learning until things aren't that complicated. On the other hand, if you are still screaming," I don't have the time to study! Between the kids, work, and finishing my education, I'm booked solid!" Well, unless you are booked solid with clients of some sort that want to give you loads of cash, then I would consider not only desiring to manage your finances better, but to manage your time better as well. If you want something bad enough, you will find the time. In addition, you might have to reconsider your priorities. Living the good life, for the average person, means serious business. If you can afford a financial advisor, go for it! That's one expense that can be worth your while, but, you will definitely want to stay consistent in learning for yourself as well. Getting started, a good financial advisor can push you in the right direction when you can't seem to do it on your own. How can you invest money that you don't have? You need to figure out how to earn more...or make some tough sacrifices.
The bottom line is you need to be focused on the long run benefits you will get in the end. No one ever said going from a check to check life to your dream life would be easy! My friends, unless you are so blessed as to have the opportunity to attain an extremely large amount of money at once, my research, and the testimonials of all those who have applied these four things in order to accumulate wealth, proves that these four key points are what will give you the opportunity to accumulate wealth gradually. There are other points that the wealthy focus on, but these are the main places where one should start. What these four points really are, are habits. A good way to developed a habit is by practice. Therefore, you can not just simply read information like this and think that the knowledge will then help you. You MUST apply the knowledge in order for it to be beneficial.
Once you have decided for sure that you are ready to take FULL control of your financial habits, then you will definitely want to start developing these four main habits into your life. Know, as well, that this is not an overnight process, but, it is a process that needs to begin in order to see the final results. So, for anyone's sake and financial future, the sooner the better! Of course, if you need to take it one key point at a time, then that is perfectly fine. In fact, that is what I would recommend, as it has worked for me. Sometimes we need such a strong focus on something in order for it to become habitual in our lives as opposed to keeping the old conflicting habits. The truth and the beauty, however, is that it can be done. So focus on your spending first, if that is what you need to do to bring the awareness and discipline into your actions.
Then, direct your focus on acknowledging your debt (which I know can be hard for some people), and continue on to saving and investing. You will gain disciple from consistently and seriously tracking your spending habits and then you will attain the strength to begin tackling your debt. From there you will developed the financial consciousness you need as well as the confidence to then move one to mature financial actions such as saving substantially more than you have in the past, as well as actively seeking the steps to investing.
Portia has been writing for many years with a passion to help others. Everything from her poetry to the articles she writes, and even her books are inspired by her love to write, and her ability to connect with others through this art. Most of all, her objective is to get across the message at hand. See more on this particular topic at http://amindofwealth.blogspot.com
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