GOOD TO KNOW: PERSONAL FINANCE SCHOOLED

 
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hat Is Money ? – Understanding The Consumer Society
Before we can dive into helping you learn how to become financially set and stable, or wealthy, we first need to understand what these words mean.

What is money ?
Why is it important, and why do people never seem to have enough ?
In this chapter, we are going to answer these questions to enable you to have a clear understanding throughout the rest of this book.

If you don’t understand what money is and how it works, it is going to be increasingly difficult for you to get onto the road to financial freedom.

What Is Money ?
When you hear the word money, you probably picture the bills and coins that are in your wallet. Or maybe you see your debit card, credit card or bills. All of these would be accurate.

Money is defined as being any article or confirmable record that another will accept as compensation for products, services, or repayment of debts in a socio-economic context.

Money has four functions:
a medium of exchange, a common measure of value,
a standard of deferred payment, and a store of value. Below we are going to briefly look at what each of these means.

A Medium Of Exchange – This is when money is used to intermediate the exchange of goods and services. Money avoids the coincidence of wants problems and compares the value of dissimilar items.

A Common Measure Of Value – Money is a standard measure of and common denomination of trade. It is a basis of for quoting and bargaining of prices and is needed to develop efficient account systems.

A Standard Of Deferred Payment – This is an accepted way to settle a debt. When debts
can be denominated in money, the real value of those debts can change due
to inflation and deflation.

A Store Of Value – If money is to be a store of value, it has to be able to be saved, kept, and reclaimed in a reliable manner.

The value or worth of money has to also be persistently stable over time. By saving and storing money, you are enabling yourself to have purchasing power in the future.
Why Is Money Important ?
While many people can agree that money is not everything in life, money does play a very important role in our lives.

Obviously, we need money to provide our basic needs, a home, food, water and clothing. Beyond that, money is essential to help us achieve our life’s goals and supports such as family, healthcare, education, charity, adventure and fun.

Money also allows for us to have financial security. Having money means that you are not dependent on being employed, are not living paycheck to paycheck, and are not forced to put up with abuse from your boss because you need your job.

When you have money, you are able to have more control over your life.
You have the freedom to carve out your own path without the worries of being confined in a career where you are unhappy.

Many people imagine that to be wealthy, you need to live in the biggest house, drive the newest car and go on the most expensive vacations.
However, that is not what this book, or what wealth is about. Having lots of money, or wealth is about having very few wants.

It’s about being able to make the choices that are best for you and your life without being limited or stressed out about still meeting your basic needs.

Why Do People Never Seem To Have Enough Money ?
There are two main reasons that people never seem to have enough money and are always trying to become richer is because they are rich and not wealthy.

While many people think that being rich and being wealthy are the same thing, they are very different. When you are wealthy, you aren’t worried about money. You have enough money to meet your basic needs at all times.

Someone who is wealthy is someone who is not going to face poverty.
Someone who is rich is someone who has accumulated enough to purchase the comfort
of a luxurious nature that is above the common people.
However, many people who are rich, purchase these items using credit and are dependent on their jobs in order to make those payments.

When you are rich, you are never really financially secure. Someone who is wealthy who is someone who is about to create a residual income stream. This means that they never have to work for their money, but they are always making money.

People aim to become rich in life, as opposed to becoming wealthy.
What Is A Consumer Society?
The second big reason that people never seem to have enough money is that we live in a largely consumer based society.
The main characteristic of a consumer based society is that the buying and selling of goods and services are the most important activity, both socially and economically.
The more things that a person owns, the more successful they are deemed to be.

You can see examples of this all around you, here are a few examples of a consumer society you might find around you:
● Remember when you were in High School and really wanted that brand name binder, shoes, jacket, or sweater ?
Or in elementary school when you wanted to have a specific character on your lunch box? These are both examples of a consumer society.
Here are two more examples:
● Neighbor One just bought a new car. It is a base model of an upscale brand and comes with a large price tag.
When Neighbor Two sees this, he decides that he also needs a new car.

Instead of going for something that is realistically within his budget, he thinks of Neighbor One and decides to go with a higher end model of another upscale car brand.
He makes sure that everyone who was excited for Neighbor One sees him park his new car outside his house;
● Family One just bought their family a new ten-foot pool for the backyard.
Family Two lives next door.
When they see Family One’s new pool, they decide their eight-foot pool that they have owned for 3 years is no longer big enough for their family.
They head out to the store and settle on a new twelve-foot pool.

In both of these examples, we can see where people are trying to one up each other.
If you pay attention to the people around you, and maybe even yourself, you can see how the things you purchase become a large part of the conversations you have with one another, and how people almost compete to own the most things, the biggest things, or the most expensive things.

The consumer society that we live in is a huge part of why people aim to be rich instead of wanting to be wealthy. When you are wealthy, you aren’t aiming to own more things.
Instead, you are happy with the things you have and simply want to maintain your lifestyle.

The Value Of A Dollar
When you have money, it can be hard to remember the value of a dollar. This is even more true in a consumer society. When people are making the choice to have the newest smart phone, nicest car, and biggest pool, they forget what the value of that money is.

To help you learn what the value of a dollar is, think of the time value that is associated with that money. If you are going to spend two hundred dollars on a smart phone, think about how many hours you needed to work to afford that phone.
Ask yourself if that purchase is still worth it.

You are likely going to find as you convert your purchases and expenses into the number of hours you are working to earn that money, you are going to spend less money on things you don’t need.
This is going to help you veer away from the consumer society most people live in.

Now that we have a good understanding of what money is, how it works, its value and the importance of money in our lives, we are going to look at some of the differences between making money and earning money, which are not the same thing.

Earning Money And Making Money – What Is The Difference ?
Many people think that earning money and making money are the same thing, but like with most opinions about money, this isn’t the case. In this chapter, we are going to look at what it means to earn money and what it means to make money.

We are also going to look at which of these categories most people fall under and why making money is better for you than earning money. Earning Money When you are earning money, you are trading your time and energy for money. In other words, you work for an hour, and you are paid for an hour.

If you do not work for that hour, you aren’t paid. It doesn’t matter if you are paid hourly,
on a salary or commission. You are being paid by someone else in exchange for your time and energy. This means that you are relying on some other entity for the money that is
going to support you and your lifestyle.

Another aspect to earning money is that when you work for an hour, you are only going to be paid for that hour once. This is important to remember as we look into what it means to make money. Making Money When you are making money, you use your time and energy once and get paid over and over again.

Making money allows you to be independent and doesn’t require you to depend on someone else for the rest of your life. People who earn money are often the ones who are in debt and are living paycheck to paycheck. Those who are making money are wealthy and have much more financial freedom.

The idea of putting your time and energy into something once and being paid for it over and over again may seem as though it is too good to be true. Here are a few examples of ways people make money:
● Coming up with an invention that they are able to sell to a person or company and receive an ongoing royalty;
● Writing a play that is licensed to a production company to turn into a movie or TV show;
● Investing in real estate properties and renting them out for more than the mortgage cost and other expenses;
● Investing in a parking lot and renting out the same spaces every day;
● Investing in dividend-producing stocks or other interest-producing financial instruments that pay out regularly.

This should give you an idea of the limitless possibilities that are out there for ways to do something one and be paid over and over again for it.

Some people refer to this as passive income instead of earned income, but anyone who has invested in an income producing asset knows it is rarely completely passive.
There is usually consistent work that is going to be involved in ensuring the asset contains to produce a regular income.

Do You Need To Earn Money To Make Money ?
Some people believe that it takes money in order to make money.
While this is true, it doesn’t always have to be your money that you use in order to make money. You could be able to start making money right away if you are able to borrow the money by having Some people believe that it takes money in order to make money.

While this is true, it doesn’t always have to be your money that you use in order to make money. You could be able to start making money right away if you are able to borrow the money by having someone invest in your idea, or through a loan.

This is referred to as leverage. Leverage is when you are able to utilize other people’s time, energy, and money to make you money. This could mean that you take your idea for a play to a play wright who hasn’t been successful financially yet, and partnering with that person to get the play written.

It could also be working with an investor to financially back your real estate deals when they don’t have the time to find them, and you don’t have the money to back them. The downfall to using leverage is that you aren’t completely in control of the process.

However, leverage is a great way to get your money making career started. Sometimes it doesn’t take much money to create an income producing asset. Occasionally things might just fall into place the way you need them to and allow you to begin making money.

Why Is The Difference Between Making And Earning Money Important ?
Eventually, you are going to be making enough money that you are going to be able to support your chosen lifestyle. At this time, you could choose to stop earning money.

In other words, you can stop working at your day job and rely only on your “passive” income to support yourself. Alternatively, you can continue earning money until you are able to support both your chosen lifestyle as well as contribute to charities or community projects.

Why Do We Want To Be Wealthy ?
The idea of being wealthy and not having to work probably sounds pretty appealing to most people. However, other people might be thinking, but why would I want to be wealthy ?
I like my job, and I am not living beyond my means, and I am earning more money than
I need to survive.

If this is the case for you, there are still lots of reasons that being wealthy is more beneficial to being rich, and of course, why it is much more beneficial to be wealthy than to be poor.

Freedom – When you are wealthy, you have the freedom to do what you want, when you want it. You aren’t confined by being needing to be at work at a certain time, needing to meet deadlines, or putting in a certain number of hours at a job. If an opportunity comes up, you are able to take advantage of it without worrying about your finances.

Options – When you are wealthy, you are able to take advantage of opportunities that other people may not have the finances to. You are able to take your life in any direction you choose too.

You can choose to invest in ideas that are high risk and be able to reap the benefits of those risks without worrying about the loss you might incur. Choices – With all of the options you have, you are able to make choices. Unlike those who are limited by their finances, when you are wealthy, you are able to make virtually any choice you want to.

Relationships – People who are wealthy, network and build on relationships. If you have money, people are going to start coming to you with options to get the best deals, investments and opportunities.

Connections – People who are wealthy typically have mentors who are able to help them. With any goal that a wealthy person has, they are able to surround themselves with people who are experts to help them get the result they are trying to achieve.

Philanthropy – Most wealthy people want to give back. It is human nature for us to want to contribute to a better world. While you don’t need to have money to be a philanthropist, when you have money you have the freedom to do a lot more for others than you can when you don’t have money.

Health – People who have money usually have a trainer to help them keep physically fit. Since they have money, wealthy people also tend to eat a lot better than those who don’t have money and are therefore able to keep themselves healthier.
They are also not worried about medical expenses.

Resources – Resources are more readily available to those who are wealthy. Whether you want to have your child in a specific school, live in a desirable neighborhood, travel, or anything else, you have a better chance of accomplishing these things if you are wealthy.

Experiences – When people have wealth behind them, they are able to experience anything they want to. They can travel the world, have a collection, or take part in any hobby they desire to. Since they have wealth, they are also able to ensure that their children are able to get the experiences they feel are important for them.

All of these things can be done without the need to worry about where the money is going to come from and how long it is going to take for them to save up this money.
A lot of these things aren’t only available to those who are wealthy.

In fact, many people who are not wealthy find ways to do a lot of the same things as wealthy people. However, there is one big difference between how those who are wealthy and those who are not wealthy do these things. That difference is that when someone who is not wealthy tries to do these things, there needs to be thought and planning and budgeting.

Often it requires that a second, and even a third, job is found. It can also require fundraising and asking other people for help. When you are wealthy, you are able to do the things above without needing to worry about where the money is coming from.

In the next chapters, we are going to look at some of the habits that wealthy people have, as well as those that poor people have. Pay attention while you are reading these lists, and see where your habits fall.

If you aren’t happy with where your habits fall, make a point of changing your habits to lead your life to where you want it. Habits Of Wealthy People Those who are wealthy have a set of habits that are unique to them.

Meditation – Many people who are wealthy attribute that wealth to meditating.
When you meditate, you are taking care of your body and mind by helping you to relax and focus your mind.

Wake Up Early – There are many wealthy people who attribute their wealth to being early risers. When you get up early, you are able to start your day ahead of everyone else.
This means that you can respond to others, exercise and find some personal time before the day gets hectic. Early risers also tend to be happier and more proactive.

Network – People who are wealthy realize the importance of networking. Research has shown that networking leads people to performing better as work and helps them to become more innovative. Stay Busy – People who are wealthy are rarely idle. When they do find themselves with spare time, they use it to learn something or to stay active.

Can Say No – Wealthy people know when they should say no, and they don’t feel like they need to say yes. They realize that saying no to negativity, extra work and time wasting activities will allow them to increase their productivity.

Read – Wealthy people prefer to read over watching TV. When they read, they choose to read to read for learning purposes rather than for entertaining purposes.
Make To-Do Lists – Wealthy people write out their to-do lists before they go to bed.
This allows them to set their priorities for the next day.

They number their lists to help them identify which tasks are the most important and help them to stay on track. Set Goals – People who are wealthy, set goals and visualize their success. If you don’t set a goal and visualize how you are going to get there, you are never going to get there.

Manage Their Money – Wealthy people are wealthy because they invest their money wisely, look for new opportunities, and set aside money for emergencies.
They are generous and willing to help people who are in need.

Question Themselves – Creating wealth is about critical thinking. Wealthy people surround themselves with people who think differently than they do.

This enables them to think outside the box and question their beliefs.
Doing this brings new opportunities to them.
Outsource – In order to create wealth, you need to be effective at managing your time.
On any given day, you are going to accumulate busy work.

By being able to outsource the mundane, but important, daily tasks to other people you are going to be able to accomplish more.

Live Minimally – Wealthy people don’t do without things. However, they have developed the habit of knowing what is essential and what is a luxury.
They may indulge in a few items, such as a nice house or car or brand name clothes, but they do not purchase more than they need.

Learn Every Day – Prosperous people make a mindful effort to grow, learn, and appreciate something new every day. By being able to learn and understand the way things work and how people operate, you are better able to predict the actions and needs of others and profit from it when the opportunity presents itself.

Show Gratitude – When you constantly have people around you, being able to express sincere gratitude is a good way to ensure that people have good opinions of you.
It is also a good idea to make a habit of thanking people with a gift or a card.

Meet New People – Many people are fearful of speaking in public. People who are wealthy overcome this fear by meeting someone new every day. By talking to someone new every day, you are helping to build the confidence you need to address a larger group of people.

Eat Healthy – People who are wealthy watch what they eat. They limit the amount of junk food they are consuming. They value their health and because of that, they have longer lifespans which open up more opportunities to earn more money.

They also make it a priority to ensure that they are bringing healthy food into their homes, this way when they do feel like snacking,
they can do so without indulging in foods that are unhealthy.

Exercise Regularly – Like with healthy eating, wealthy people always find time in their day
to work out. Working out is known to relieve stress and also helps you to feel better about yourself. Making the time to work out shows that wealthy people find it important to make themselves a priority.

Give Back – Charity and philanthropy are common among those who are wealthy.
Giving back to the community is an important characteristic among the wealthy, and this
is shown throughout history from Nelson Rockefeller and Andrew Carnegie to Carlos
Slim and Bill Gates.

Understand Passions – One thing many wealthy people do, is incorporate their passion into their job. They don’t work at a job because it is a paycheck. They work at a job because they are passionate about it, or some aspect of it. This is what enables them to be willing to devote so much of their time to their work; they genuinely love what they are doing.

As you can see, people who are wealthy are very much in control of their time and habits. They don’t spend a lot of time doing nothing, but they do make it a habit of taking care of themselves. In the next chapter, we are going to look at some habits of the poor.

Habits Of Poor People People who are poor, or are living paycheck to paycheck, have a set of habits that is common among them. These habits are very different than the habits that wealthy people live by.

While some of them may seem as though you aren’t able to control them, you are going to find that the habits that you have that are in this list can be easily modified to look more like the list of habits that wealthy people have that we looked at in the previous chapter.

Gambling Habits – Seventy-seven percent of people who are poor, or living paycheck to paycheck, play the lottery on a regular basis.

Many people who are poor also gamble on sports. Many people think that gambling is going to give them their big break into the world of the wealthy. However, gambling is not a sound plan. People who gamble are relying on random luck. The odds of winning Powerball, for example, are one in 175 million. That is virtually zero percent.

This means that people who are already living poor are spending money they can’t afford on a very miniscule chance that they might win money. Many people might win a couple dollars, and maybe even a couple hundred or a couple thousand.

The people that do win money, often put that money back into gambling, hoping it is going to pay off, and they are going to make even more money.
However, this isn’t how gambling works, as we stated before, gambling relies on random luck. Time-Wasting Habits – Poor people tend to rely on one stream of income.

They don’t invest their time into building their careers or building a side business to generate more income. They leave work at work and home at home. Instead of spending their time finding ways to turn their passions into income, poor people tend to spend their time watching TV, surfing the internet, and reading for entertainment.

When you spend all of your time watching TV, indulging in social media and surfing the internet, you are putting yourself in a position where you are constantly seeing ads that are prompting you to buy something that you don’t need. You are seeing what all of your friends are doing and feel the need to spend money to keep up with them.

Essentially, you are falling into the trap of our consumer society.
Time is money. When all of your time is spent on entertaining yourself, you aren’t putting yourself in a position of making more money.

Instead, you are putting yourself in a position of continuing to live your life the way you are at this moment. Time doesn’t discriminate.
There are twenty-four hours in a day, regardless of how much money you make.
It’s what you choose to do with that time that matters.

Bad Spending Habits – People who are poor don’t tend to budget their money or track their spending. Poor people also tend to make spontaneous purchases and have a hard time
being frugal. When you are making purchases without planning, you are often required
to rely on credit cards.

Many people who are poor have multiple credit cards, which people who are wealthy typically only have one. Most people who fall into the category of poor, don’t know where their money geos each month and are good at convincing themselves they need something.

Many of these people have simply never been taught how to budget and why the value of a dollar is important. Another habit of poor people is to rent their homes. When you don’t own your home, you are unable to build home equity. Home equity comes in handy when you are going to retire or want to help your kids go to college.

Poor Saving Habits – Many people who are poor do not save money, and when they do, they aren’t saving much. This means that when there is an unexpected cost, they are forced to rely on credit or, if there is no credit available, they take from one bill to pay for another.

This creates a vicious circle of never getting ahead. People who are wealthy save twenty percent or more of their income. You aren’t going to be able to change your habits overnight. In fact, the average millionaire took thirty-two years to become wealthy.

You can’t change a few of your habits and expect to become wealthy instantly. It takes time and patience. In the next chapter, we are going to look into what it is going to take for you to become wealthy.

Chapter 6: Patience – Becoming Wealthy Does Not Happen Overnight In the last two chapters, we looked at some of the habits wealthy people have compared to the habits that poor people have. This is not to imply that you can simply decide to change your habits and tomorrow you are going to wake up wealthy. It is going to take a lot more time and patience than that. It is also going to take a lot of hard work and commitment.

However, it is not impossible. Patience is easily one of the most important factors when it comes to money. While patience isn't a guarantee of success, it does dramatically increase your odds of success. Patience is also one of the hardest traits to learn.

Especially since we live in a culture of now. We tend to look for instant gratification, and we are constantly bombarded by messages that are trying to convince us that this is okay.

The messages we are seeing are telling us to buy now, to spend now, and to get what we want right now. When you buy something now, instead of waiting until you can truly afford it, you cost yourself more money.

This is because you are likely relying on credit to purchase the item that you want right now. Patience is the key to overcoming this. Below we are going to look at a few of the ways patience is going to help you achieve your financial goals.

Patience Lets Your Money Grow – The longer you can hold onto your money, the more of it you are going to have. When you leave a pool of money alone, it can compound interest and grow before your eyes.

This is going to allow you to afford more in the future, by being patient now. Patience Teaches Your Discipline – When you find something that you want to have now, wait thirty days before you buy it. In many cases, you are going to find that you can live without the item that seemed so urgent just a few weeks ago.

You are going to feel better about yourself because you were able to exercise discipline and aren’t going to have buyer’s remorse over the product you bought. Patience is going to help you to prevent mistakes from happening.

Patience Allows You To Seize Opportunities – By having the patience to wait instead of buying the item you want right now, you are going to be able to spend time comparison shopping and researching cheaper alternatives.

If you aren’t in a rush for an item, you can practice predatory shopping.
Predatory shopping means that you watch and wait for bargains and markdowns which allow you to save even more money.

Patience Lets You Discover What’s Important – As you age and mature, your values are going to change. If you are willing to wait, you are going to learn more about yourself and what is truly important to you.

Patience is going to help you practice conscious spending and keep you from buying something that you aren’t going to care to have in a few months.
Patience Keeps You Sane – Being patient means that you aren't going to care about having to keep up with other people on having what is new. It means that you are not going to give into fads and trends.

You are going to be willing to buy last year's model of a product and keep it until it dies. It means you aren't going to care about what your neighbors have, and you are going to live a quiet and content life. Being patient is going to lead you to be happier and lead you to wealth. It is hard to be patient when you are always watching TV, listening to the radio and using the internet. Our society doesn't believe in or encourage, patience.

Our society is all about now and instant gratification. This is where practicing more of the habits that wealthy people practice is going to help you achieve your goals. Another advantage of being patient is that you are going to be able to stay committed to your goals.

If you aren't able to exercise patience you are going to have a hard time making a goal and seeing it through to the end. This means that when you make a goal to create and stick to a budget, which we are going to cover in the next chapter, you aren't going to have the patience to stick to the budget you created and followed it.

Making A Budget, And Sticking To It In theory, making a budget might seem incredibly simple. Or the idea of a budget might leave you confused and frustrated. In reality, creating a budget can be confusing and frustrating, but it can also be incredibly simple. In this chapter, we are going to outline the steps on how to create a budget as well as cover some tips to help you stick to your budget successfully.

What Is A Budget Before we get into how you to make a budget and how to use it, we are first going to look at what a budget is. A budget is a written document or electronic file that is going to help you to take control of your personal finances.

A budget is an excellent tool to help you manage your money and achieve your financial goals. A budget is a good idea for you if:
● You find that money is always tight;
● You aren’t sure where your money is going;
● You are having a hard time paying off your debt;
● You don’t save regularly; and
● You want to find ways to make your money stretch further.

A budget is going to give you a clear view on how much money you are bringing in, how much you are spending and how much you are saving.
Creating a budget can help your find ways to eliminate your debt, reduce your spending, and have more money for the things that are really important to you.

Before You Begin Making A Budget Before you start creating your budget, it is important that you know what your goals are as well as where your money is currently going.

Think About Your Goals – Take some time to think about what the goal of your budget it. Decide if you are trying to pay off your debts, have more money available, save for something, build a nest egg, go back to school.

Your goal is yours individually, but it is important to have a goal in mind before you begin to create your budget.

Keep Track Of Your Money – Most people know how much money they make.
However, what most people don’t know, is where their money goes. Before you start making a budget, start tracking where your money is going.

For one or two months, keep track of everything you purchase, from groceries to coffee. Keep a copy of all of your bills that you pay, and write it all down in a notebook.

Doing this is going to help you understand your spending habits and put you on the path to success with your budget. Making Your Budget When you are ready to create your budget, you are going to follow four steps.

Calculate Expenses – The first thing you are going to need to do is calculate what your expenses are. You can use your bank statements, as well as the tracking you have already done to ensure that you are getting a clear picture.

Since some things only happen every few months, or even once a year, it is important to go back through your records and make sure that you are accounting for everything.

When you come to an expense that doesn’t occur every month, take the cost of that expense and divide it by twelve so you can see your average monthly expenses.
Keep in mind that it is imperative that you are thorough when you are adding up your expenses.

A forgotten bill is going to throw off your budget when it crops up.
A good rule of thumb is to add an addition ten to fifteen percent into your expenses over what you have calculated.

This means that if you determined that you spend $1,500 a month, add $150 to $225 to that number.
Determine Your Income – Once you know what your expenses are, you are going to need to know what your actual income is.

While you probably know what your salary is, you will get a more accurate picture by calculating any extra income as well.

This can include cash gifts, alimony, child support, interest, and rental income.

Figure Out What’s Left – Once you know your income and your expenses, you are going to be able to know if you have money left over, or if you are overspending.

If you have money left over, congratulations.
You can now earmark this money for savings or pay off debt.

If you find that you are spending more than you are making, it is time to make some cuts so you can save money and not go further into debt.

This is where tracking your spending will come in handy. If you find that you are spending two dollars a day on coffee, this works out to fourteen dollars a week and seven hundred and twenty-eight dollars a year.

This is significant when you are looking at ways to cut your spending.
If you aren't able to cut enough of your spending, you should consider ways that you can increase your income.

Be Realistic – When you are making your budget, be realistic with your numbers.
Don't say that you are going to spend half of what you are going to spend on something. Doing this is only going to cause frustration when you are trying to stick to your budget.

Be honest with yourself about where your money is going and what expenses you can cut. Sticking To Your Budget Making your budget is easier than it is going to be to successfully stick to it.

While it is okay to fall off your budget once in a while, you want to make sure that this is the exception and not the rule. Below we are going to look at some tips on how you can be more successful at sticking to your budget.

Don’t Carry Your Credit Cards Around – Availability is your enemy. If you are carrying your credit cards around, you are more likely to make an impulse purchase. This includes deleting your credit card information from your favorite websites.

Use Cash Only – When you are using cash to make purchases, you are far more aware of what you are spending. If you stick to using cash for all of your purchases, you can see when your money is gone.

When your money is gone, you are stuck until your next budget cycle. This is going to lead to you being conscious of your spending choices, as you aren’t going to want to leave yourself with no money to buy food.

Schedule A Budget Evaluation – Make time to sit down and look at your budget every couple of months. Your life is always changing and over time you might find that there are aspects of your budget that just don't work. Maybe you are making more or less money, or maybe your family has grown. Either way, it is your budget, and it is important that is works for you.
Just don't lose sight of what your long term goals are.

Keep Track Of Your Money – Keep track of where you are spending your money. If you are finding that you aren't able to buy a number of groceries that you were expecting to, look at where you spent your money and what you spend it on.

Knowing exactly where your money is going will make it easier for you to correct your budget and make it work for you. Your budget doesn’t need to be incredibly challenging.

With a little patience and consistency, you will soon be sticking to your budget, and even find that you are coming in under budget some months.

Paying Yourself First – What Does It Mean And Why Is It Important Paying yourself first is incredibly important. However, many people misinterpret what this means.

To some people, paying yourself first means that you buy yourself that big TV, ordering in dinner, or get new clothes. In fact, for many people, this is what they are being taught it means when they hear the phrase "pay yourself first." However, this is not what it means when you are advised to pay yourself first.

Paying yourself first means that you are putting money into your savings before you do anything else. Instead of paying all of your bills and expenses and then setting aside the rest, you first put your money into your savings and then you pay your bills and expenses.

This means that whatever amount you decided was going to go to your savings from your budget; that goes into savings first. Most people look at their savings as being optional.

If you want to become wealthy, you need to stop looking at it that way. You need to make sure that you are paying yourself first. Advantages To Paying Yourself First When you pay yourself first, you are guaranteeing that you are going to have a nest egg to secure your future.

This is also going to create a cushion for unexpected financial emergencies, such as your car breaking down, or unexpected medical expenses. There is also a psychological benefit to paying yourself first.

As you build savings, you can motivate yourself to save even more. This is because you are telling yourself that your future is the most important thing to you and not the cable company. While we all know that money cannot buy happiness, it can provide you with peace of mind. As a final bonus, paying yourself first encourages sound fiscal habits.

By making your savings the most important, instead of spending, you are going to have a better grasp on the role of opportunity costs and how they affect your choices. Leave Your Savings Alone Once you have saved up some money by paying yourself first, you might find yourself tempted to spend that money.

Just because the money is in your savings account, that doesn't mean that you should spend it as soon as an opportunity presents itself. Here are a few tips on how you can prevent yourself from spending your savings money.

Know Why You Are Saving – If you are saving money for winter tires in six months, make sure you have consciously acknowledged that. The same holds true if you are saving for a trip, emergencies, vet bills, the list goes on.

If you have more than one reason for saving money, create more than one savings account and separate your savings accordingly. Understanding why you are motivated to begin saving, you are less likely to decide you want something and raid your savings account.

Make Your Savings Hard To Access –As your savings account grows, it becomes easier and easier to justify taking a little bit of money out of those accounts to cover the expense of something you want.

One way to avoid this is to put the accounts out of sight and out of mind. This can mean creating an account that you need to go into the bank to use the money, it can mean giving someone else the debit card to that account, and it can even mean putting them into a bank that you don't normally use.

Have Spendable Savings – Even though your savings might be earmarked for something that is really important to you, there might still come a time when you need to access the money. This is where your spendable savings comes in.

While it may seem impossible to add another savings goal, it'll be far easier to save your savings if you have a stash of cash that you are allowed to spend.

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