Do you want to improve your financial health? Do you want to build wealth? Building wealth requires the implementation of the most important financial concept: Always spend less than you earn so that you can save more than you earn. Here are the steps to activate the wealth building process: Earn money, spend less than you earn, save, invest and then rinse and repeat that process over and over again.
In order to implement this financial concept and activate this wealth building process. you have to be willing to make sure you are operating with a wealthy mindset. As mentioned in previous articles, it is necessary to identify your money mindset, your money story and your money attitude. Analyze your financial habits and get to the core and root of any limiting beliefs. Replace your old money story with a new money story and erase any limiting beliefs by replacing them with empowering affirmation statements instead.
Assess your financial health status by writing down all your monthly income and all your monthly expenses. Then, determine your net income by subtracting your monthly expenses from your monthly income. If this difference is a positive number, you have money left over to save or invest. If the number is a negative number, you need to make some adjustments. You will need to either increase your income (by finding an additional stream of income) or look at your monthly expenses again and determine which expenses can be decreased. You will never be able to build wealth when you are operating with more expenses than income. If this is the case you are operating with a deficit and you will always be looking to those credit cards, loans and in some instances payday loans to make ends meet. You will be stuck in this endless, repeating loop until you spiral so far out of control your finances crash.
Many people think that their financial situation will change if they just make more money but that is not true. The more you make, the more you’ll spend. Most people don’t have an income problem, they have a money management problem. Your future and the future of the generations that come after you are in your hands. By being courageous enough to change the way you manage and handle your money you will be able to affect the financial well-being of your family.
Because financial literacy is not taught in schools most parents don’t have the skillset to teach financial literacy to their children. But our children pick up their beliefs around money at an early age from their parents and family. But when you decide to make wealth building a priority and save more than you earn, you have the ability to destroy the generational curse around money by being the first person to break away from what seems so normal but is so financially destructive.
Most people make putting a percentage of their income into savings a low priority so instead of paying themselves first they make putting money aside a portion of their income at the bottom of the list. They plan to save whatever money is left after paying the bills or buying the things they need and want but they never have any money left over to put into savings or investments. This goes against the financial concept mentioned earlier. When a person wants to build wealth but does not make savings a priority, they will not succeed.
One way to improve your ability to save more money is to not go into anymore debt. I know the holidays are approaching. Most people really overextend themselves during this time of year. I’ll never forget how I use to be caught up in the buying frenzy during the holiday season. Spending money I really didn’t have to spend. Why do we do it? First of all, it’s because we allow the media to tell us their vision through commercials and ads blasted over and over again on the television, radio and internet. Trying to convince us that we are saving so much money if we purchase this or that. But have you ever taken the time to really add up the cost to see how much you’ve saved? Especially if you put it on your credit card or got a loan to get it. Anyway, I had a rude awakening. It wasn’t when the credit card bills came in a few months after the holiday. It was when I realized that I was still paying for all the charges I made for the previous holiday season and the holiday season was back again. I realized that I had to just stop because my debt was going up. It was then that I changed how I shopped for the holidays. First of all, I realized that it wasn’t about the gifts at all. It was really all about family. Getting the family together and showing love. So, I started off with the total amount of money that I would spend and then I committed that I would not spend more than that set amount. Then, I decided how many people I wanted to buy gifts for with the money I had available. It was the best thing I could have done because I became more creative in what I gave as gifts. Oh, and here is the most important thing, I used only cash. Once the money was gone, I was done.
Here is another good point. When you have to spend money, use cash and not credit. Save up for the things you want or need to buy. When you decrease your debt and expenses, you will have more money to save and invest. It may take a while to develop a great savings habit so don’t stop striving to save something, even if it is just a little bit, every time you receive money.
Make saving a portion of your income a principle you live by. You’ll never regret it. The more you put aside for savings, the better off you will be. Just making this your number one priority will make a positive change to your present and future financial health.
I hope this was helpful but if you want to go to the next level in your financial health, sign up for a free 15-minute complimentary session. Click here to schedule your Financial Freedom session.