Many people are accustomed to living paycheck to paycheck. Once the bills are paid there’s nothing left to save, even though what was left over was unwisely spent. It is estimated that most families are a mere two months away from bankruptcy. Many people simply don’t know how to use money to insure and increase wealth.
Economic prosperity has one major flaw. It promotes the feeling of invincibility. Spending increases when jobs are abundant. Few people think about the need to save, nor prepare for any economic downturns.
One of the cardinal rules to achieving financial independence is to realize that the handling of money is a personal business. No corporation will last long if it handles its revenues like the average family. To understand how to handle money and make it work to increase value and personal self-worth, it’s necessary to employ rules that guarantee a strong financial footing no matter how the economy is like.
Keep a Financial Ledger
A ledger defines where money is going. Everything spent or saved should be accounted for. A ledger reveals all the areas that act as drains of the family finances. While keeping a record of all expenses and income may seem like a lot of work, it is one of the best ways to prevent surprises and insure that the finances of the family increase every year. Unfortunately, creating a budget is not something people like to do.
A Financial Plan
Many people take more measures to plan for a vacation or a wedding, but neglect to do the same when it comes to spending and saving. Without a ledger, there can be no financial plan. A plan takes into account the necessary expenses and the minor expenses as well as income sources. Just as the accounting department of major businesses, if the outgo is more than the income, something can be done to balance the books.
For many it’s difficult to say no to media advertising and the enticements to buy on credit. The use of credit cards must be tempered by what’s available to spend. Wise spenders have the discipline to say no to temptations and stick to the family financial plan.
Avoiding Spending with Rise in Income
That raise in pay, the Christmas bonus or the tax rebate have many thinking they have added spending power. Quite the contrary. They should be thinking in terms of saving power. That pay raise should lead to more savings based on keeping the standard of living the same as before the windfall arrived.
Security Through Insurance
Insurance is a necessary evil. Assets must be protected against fire, theft or acts of God. The right insurance policy can protect all assets and create peace of mind in case anything does happen. It takes years to rebuild equity. But a good insurance policy provides peace of mind and fewer worries about money. It increases financial independence.
Many families work two or more jobs to make ends meet. Often, those extra jobs only add to existing burdens. The wisest use of leisure time is to use those hobbies and interests to bring in extra cash without having to work extra hours in a second job. An extra hundred dollars a month may not seem like much, but it adds up over the year. Many have started home businesses that became major enterprises simply by doing something they loved.
It’s human nature to want to improve the quality of life and the standard of living. Unfortunately, many become so preoccupied with the need to strive that they lose sight of what life should be. They find less contentment by being constantly “on the run.” It’s those who enjoy what they have who are less stressed and suffer less from the diseases of modern society.
These seven points can eliminate that seventy percent of all worries about money. They will increase the value of You, Inc. and insure that the personal financial business will stay stable and profitable for years to come.