You'll be amazed to know just how your expenses can and will expand to at least the amount of your income if you don't manage it properly.
A great way to ensure that you consistently build wealth is to pay yourself first.
Take 10% of your paycheck and set it aside in a separate account the moment you receive it.
You'll be surprised how little you will miss that 10%, and the power of consistently growing these accumulated savings through smart investments.
Next, take the monthly expense records that you have created in the previous section and analyse where your money is going.
Are the unnecessary expenses on your list? Instead of approaching it as cutting down on your expenses, look at it as reprioritising your spending.
Would you create better long term results for yourself by spending that $75 on cable TV or on self-education? Remember, average people spend on themselves, but successful people invest in themselves.
Finally, eliminate the high interest payments that you are forking out on your credit card and other consumer debt.
If you make a purchase on credit and only pay the minimum repayments for any length of time, you will end up paying more than double the cost of the item.
Treat your credit card as a free credit facility for the duration of the interest fee period, and then pay it off immediately once it is due.
What if you already have a substantial consumer debt accumulated to your name? First of all, don't be tempted to use the 10% of savings that you have set aside to repay the loan.
That money is yours to invest and to grow for your financial future.
What you need to do is to set aside an additional 20% of your income specifically to pay off your debt.
That's right, you're going to have to make do with 70% of your current income.
Again, you'll be surprised to see just how little you will miss that 30%.
Take that 20% and pay the minimum payments for all your debt, and then use the balance towards paying off the principal amount of the highest interest charging debt.
Do this each month until you pay off all your debts.
The first month that you are debt free, take that 20% and reward yourself with something that you want.
Then, if you find that you've been living comfortably on your 70%, you may decide to allocate that 20% together with the 10% that you are paying yourself for growth purposes.
That's it.
Simple tips for a healthier bank balance.
A great way to ensure that you consistently build wealth is to pay yourself first.
Take 10% of your paycheck and set it aside in a separate account the moment you receive it.
You'll be surprised how little you will miss that 10%, and the power of consistently growing these accumulated savings through smart investments.
Next, take the monthly expense records that you have created in the previous section and analyse where your money is going.
Are the unnecessary expenses on your list? Instead of approaching it as cutting down on your expenses, look at it as reprioritising your spending.
Would you create better long term results for yourself by spending that $75 on cable TV or on self-education? Remember, average people spend on themselves, but successful people invest in themselves.
Finally, eliminate the high interest payments that you are forking out on your credit card and other consumer debt.
If you make a purchase on credit and only pay the minimum repayments for any length of time, you will end up paying more than double the cost of the item.
Treat your credit card as a free credit facility for the duration of the interest fee period, and then pay it off immediately once it is due.
What if you already have a substantial consumer debt accumulated to your name? First of all, don't be tempted to use the 10% of savings that you have set aside to repay the loan.
That money is yours to invest and to grow for your financial future.
What you need to do is to set aside an additional 20% of your income specifically to pay off your debt.
That's right, you're going to have to make do with 70% of your current income.
Again, you'll be surprised to see just how little you will miss that 30%.
Take that 20% and pay the minimum payments for all your debt, and then use the balance towards paying off the principal amount of the highest interest charging debt.
Do this each month until you pay off all your debts.
The first month that you are debt free, take that 20% and reward yourself with something that you want.
Then, if you find that you've been living comfortably on your 70%, you may decide to allocate that 20% together with the 10% that you are paying yourself for growth purposes.
That's it.
Simple tips for a healthier bank balance.
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