The key to achieving a goal is reducing a problem to simple steps. Here are the five steps to achieving wealth.
1. Focus on Increasing Income, Not Your Bills
First Lady Eleanor Roosevelt said, “Great minds discuss ideas, average minds discuss events, small minds discuss people.”
Be a great mind and discuss ideas. I know, you have a mountain of bills so it’s hard to brainstorm how you will generate more income. You must free your mind and create the space to think. Where do you think of your best ideas? In the shower? While driving? Sitting listening to music? Create those experiences so you can let your brain flow. Do you have a great business idea but just need to wrap your head around it and take action steps? Create that time to make that happen. Too busy worrying about your bills to do that? Keep reading.
2. Start Using a Budget
You need a written plan for every dollar you have. Simply, calculate how much money is coming in and what you spend your money on. Figure out your needs vs. wants.
Prioritize saving for an emergency fund. If the last two unprecedented years have taught us anything, it is to expect the unexpected. Have 3 to 6 months of savings for expenses in case of a job loss, medical emergency, or other change in life situation.
Budget to make payments toward debt or pay off debt completely.
Lastly, incorporate fun: Like an extreme diet, an austere budget where you can’t do anything go anywhere, or celebrate life’s milestones is not sustainable. . Eventually it becomes too restrictive and you will binge, or in this case, spend too much. Include a category for entertainment, with funds for travel and holidays. Your “Fun” budget category may be small, but don’t totally eliminate it.
Revisit your budget often and fine tune to cut corners. Reward yourself when you meet debt payments and savings milestones.
Get in touch with us at firstname.lastname@example.org and we will send you our free budget worksheet that easily helps you organize your budget in minutes.
3. Live Below Your Means
You do not need to spend to impress anyone else. If you love a luxury item and you are buying it because you want it and like it, (and have budgeted for it) that is a good reason. It’s a losing battle to purchase items or participate in costly activities just to “keep up.” Trust me, I’ve made this mistake. You go eat at a restaurant your friends want to try and halfway through the meal you realize, “I don’t even like this place or this food.” Buy classic quality items that last, not fast fashion that is in and out in a week. Stack your activities. Go for a stroll with a friend instead of dinner: workout, walk the dog, catch up; hanging out costs nothing.
4. Get Out of Debt and Automate Payments
You need to get out of debt, but you also can’t constantly be thinking about it. If your mind is consumed with thinking about your bills and what you owe, you will feel like you are washing a never-ending pile of dishes you can never complete. Start an automatic debt repayment plan and revisit it every three months to see if you can increase payments. This will allow you to focus your mental energy on ways to turn your passion into your 9-5 or how to grow your side hustle.
5. Be Generous
You get what you give. Practice gratitude daily. Don’t be stagnant with your generosity. Even if you are able to donate a dollar per month to a worthy charity, you are making a difference. If you can tip extra to the delivery person who battles inclement weather to bring you your dinner, you’re making a difference. Keep the flow of money going by doing exactly that. Keep it flowing.