I've been focusing on investing and stock market issues in this blog lately, and it occurs to me that maybe I'm giving the wrong impression. Making your money work for you is a good thing, and it can certainly help, but by itself that is not the way to wealth. There is only one tried and true path to wealth that consistently works and can work for anybody.
The three steps to achieving your financial dreams are simple: work hard, save regularly, and spend less than you earn. It takes discipline to build wealth. No matter how much or how little you earn, you can easily spend yourself into the poor house. Likewise, you can save yourself into prosperity.
The earlier you start saving, the easier it is. The power of compounding over time will multiply your early savings. It's much harder to catch up later because you don't have as many years for your money to gather interest and more interest on the interest.
That's not too say that it's ever too late to start saving. The important part of the plan is to make saving a habit. Set aside money every time you get paid that goes directly into a savings account. Whether it's your 401k, a brokerage account, or some other savings fund, make sure it is segregated from your regular bank account so that you're less tempted to dig into if things get tight.
Most companies will split your direct deposit paycheck between two or more banks or bank accounts for you so that you can direct a certain dollar amount or percentage from your paycheck directly into a separate savings account while the remainder goes into your checking account.
The more obstacles you put between your savings account and your wallet, the less likely you are to spend it. A brokerage account is going to take three days to settle a stock before you can access the cash. That certainly reduces impulse spending, while still allowing access in the event of an emergency.
Start immediately with any amount you can spare, just a few dollars a week on a regular basis will add up and help develop the habit of spending. Increase the amount you set aside when you can and resist decreasing it.
If you have trouble finding money to set aside, think about an expense you can cut out and put that money into savings instead. Instead of buying a $6.00 cup of Starbucks coffee each day, buy a $1.00 at McDonald's, or make it at home and take it with you. There's as much as $25 or $30 a week if Starbucks is a daily habit. If that doesn't seem like much, consider that it's over $1200 every year.
Maybe Starbucks isn't your thing, but chances are there's something you can eliminate or reduce in order to divert the cash toward a savings plan or toward the reduction of high interest rate debt.
Start saving now, be disciplined. Making regular contributions toward your savings is more important by far than where you park the money. While it is possible to multiply your savings over time with the right investment vehicles, the first step is to save what you can from your existing income.
If you're already struggling or failing to make ends meet, consider a second job on the weekends or a couple of evenings each week. Nobody said it was going to be easy. Well, some people say it'll be easy, but they're lying.
The three steps to achieving your financial dreams are simple: work hard, save regularly, and spend less than you earn. It takes discipline to build wealth. No matter how much or how little you earn, you can easily spend yourself into the poor house. Likewise, you can save yourself into prosperity.
The earlier you start saving, the easier it is. The power of compounding over time will multiply your early savings. It's much harder to catch up later because you don't have as many years for your money to gather interest and more interest on the interest.
That's not too say that it's ever too late to start saving. The important part of the plan is to make saving a habit. Set aside money every time you get paid that goes directly into a savings account. Whether it's your 401k, a brokerage account, or some other savings fund, make sure it is segregated from your regular bank account so that you're less tempted to dig into if things get tight.
Most companies will split your direct deposit paycheck between two or more banks or bank accounts for you so that you can direct a certain dollar amount or percentage from your paycheck directly into a separate savings account while the remainder goes into your checking account.
The more obstacles you put between your savings account and your wallet, the less likely you are to spend it. A brokerage account is going to take three days to settle a stock before you can access the cash. That certainly reduces impulse spending, while still allowing access in the event of an emergency.
Start immediately with any amount you can spare, just a few dollars a week on a regular basis will add up and help develop the habit of spending. Increase the amount you set aside when you can and resist decreasing it.
If you have trouble finding money to set aside, think about an expense you can cut out and put that money into savings instead. Instead of buying a $6.00 cup of Starbucks coffee each day, buy a $1.00 at McDonald's, or make it at home and take it with you. There's as much as $25 or $30 a week if Starbucks is a daily habit. If that doesn't seem like much, consider that it's over $1200 every year.
Maybe Starbucks isn't your thing, but chances are there's something you can eliminate or reduce in order to divert the cash toward a savings plan or toward the reduction of high interest rate debt.
Start saving now, be disciplined. Making regular contributions toward your savings is more important by far than where you park the money. While it is possible to multiply your savings over time with the right investment vehicles, the first step is to save what you can from your existing income.
If you're already struggling or failing to make ends meet, consider a second job on the weekends or a couple of evenings each week. Nobody said it was going to be easy. Well, some people say it'll be easy, but they're lying.
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