Wealth Creation Rules to Live By
Have you ever wondered why money comes so easily to some people, yet others seem to struggle for every penny they earn? The difference between the two types of people often lies in how they think about money and wealth. Here are some wealth creation rules to live by to help you become one of those who will always have more than what you need, instead of someone who never has quite enough.
Change your money mindset. How you think about money and wealth is the single most important factor that determines whether youre wealthy or not. If you hold any wrong beliefs about money, or believe that you don’t have enough, that thinking can hold you back from ever becoming wealthy. Instead, recognize the power that your thoughts have over the money in your life and embrace it. A good book to read to help you change your mindset about money is Napoleon Hill’s Think and Grow Rich. This book explains how your way of thinking can make you wealthy, or keep you from experiencing the riches you desire.
Be optimistic about wealth. Money is important in our society. Not having enough can be a very scary thought. But instead of being fearful of money, be optimistic. Visualize yourself having enough money to pay your bills and enjoying the finer things in life. What would it feel like to have a certain dollar amount in your bank account? Focus on that image and keep it foremost in your mind.
When you are optimistic about wealth instead of afraid of not having enough, you will be on the path to overcoming adversity and creating wealth.
Be willing to take risks. Realize there is some risk involved in creating wealth, but that anything worth achieving is worth the risk. Some people never experience the fulfillment they crave because they’re afraid of failing. Failure isn’t something to be feared. Instead of procrastinating and being afraid of failing, plan your actions carefully so you will be prepared no matter what happens.
Take action. Take action where your money is concerned. If you’ve been waiting for wealth to come along and find you, it’s time to start taking action to create wealth instead. If you own a business, be prepared to work harder and offer better services. Take positive steps that will help you create wealth.
Invest your money wisely. Make your money work for you. The wealthy don’t keep their money in savings accounts. To protect the money you have and ensure it continues to grow, it should be investeted in a fund that’s well-balanced between safe investments and risks. This is how the wealthy use money to create more wealth.
When you develop the right mindset toward money, take smart actions, and manage your money wisely, you will become a person who creates wealth and stop being someone who is afraid of not having enough.
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Every Little Bit of Savings Adds Up
Living on a budget is the key to financial freedom, but getting started can be frustrating. When we look at our expenses and see all of those bills we’re paying every month, it’s easy to throw our hands up in disgust. But what about all those little expenses we incur? You might be surprised to find out just how much they amount to.
It’s easy to dismiss cutting back on little things. A few dollars a month won’t make a significant difference in the big picture. But a few dollars here and a few dollars there adds up to a few more dollars. When you cut back in a lot of small ways, you could end up with a lot more money at the end of the month.
Waste Not, Want Not
One thing we can do that is good for the budget is stop wasting so much. This can apply to many areas in our lives. From eating to home heating, waste equals money going down the drain unnecessarily.
Cooking for the family instead of eating takeout or dining out is a great way to save money. But if you’re throwing food out, the benefit is reduced. So if you have leftovers, don’t let them end up in the trash. Some dishes freeze well, and this makes for easy dinners when you don’t have time to cook. You could also eat dinner leftovers for lunch the following day.
If your home is not well insulated, you’re probably wasting lots of money on home heating and cooling. Insulating will cost some money up front, but it will pay for itself quickly. If you have drafts around windows and doors, weatherstripping can help maintain the temperature of your home.
Most households waste an unbelievable amount of electricity. This can be prevented in part by using energy efficient appliances and light bulbs. Turn lights, televisions, computers and other devices off when you’re not using them, and open blinds to take advantage of the sun’s light during the day.
Do Yourself a Favor: Do It Yourself
Any time you pay someone else to do something that you could do yourself, you’re spending money unnecessarily. This applies to little things like buying coffee instead of making your own, as well as to larger expenses such as home repairs.
Many of us buy coffee or a soft drink from a convenience store or coffee shop on the way to work in the morning. This can really add up over time. Instead, make your own coffee, or buy soda in 2-liter bottles and pour some into a smaller bottle or cup to take with you. The same applies to lunches. Instead of springing for fast food, take a sandwich or something microwavable to work.
While we’re not all good at all types of repairs and maintenance, most of us can do some things for ourselves. Maybe you could change your own oil instead of paying someone else to do it. If the walls need painting, consider getting friends and family to help you do it instead of hiring a painter. Things like these can save us a noticeable amount of money right away.
When you add up the savings, little things can make a big difference to the budget. So take a close look at your budget and see what small expenses are lurking there. If you can eliminate or reduce them, it could positively impact your bottom line.
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Develop a Positive Money Mindset
How you think about money is the single most important factor that determines whether you are wealthy or not. So, if you want more money in your life it is essential that you develop a positive money mindset.
However, many of us are taught to think negatively about money. We’re told things like “money is the root of all evil,” and “money doesn’t grow on trees.” No wonder we have such a difficult time thinking positively about money! You may have even been taught that rich people are greedy and as a result are subconsciously avoiding wealth and missing out on the great opportunities having money can provide.
As long as you hold on to negative and incorrect beliefs about money, you will never create the wealth you desire or deserve.
To change your money mindset, you must first recognize that money is not good or bad by itself. It is just a tool. In fact, money is more often used to do good than bad. Think about the wonderful charities that have been able to help people all around the world when they are given large donations of money. Appreciate all the good that money is used for. It is important part of life and is used to make positive changes in the world. Money should be sought after, not avoided.
Recognize that money is abundant. When you were young, you may have been told by your parents that money doesn’t grow on trees. If you’re holding onto that belief now, your own mindset could be holding you back from attracting money. Money may not grow on trees, but there is an abundant amount of it for everyone, including you. However, if you believe that money is scarce, that belief will keep it far away from you.
Giving money away is another way you can develop a positive money mindset. Wanting to hang onto every cent you have is a sign of a stingy mindset and reinforces the idea that there is not enough of it. Giving reinforces the concept of abundance.
Finally, be happy for those who are successful and have money. We often remember being told that those who have money are greedy and are tempted to think negatively about them. In fact, the opposite is usually true. Rich people often accumulate their wealth by sharing what they have with others and believing in the idea of abundance.
When someone else has money, don’t resent their success. If you have feelings of jealousy, that will only hold you back from achieving your own wealth and success. Instead, be happy for them and remember that there is enough wealth for you too, and your turn will come.
By making these changes in how you think about money, you will be on your way to developing a positive money mindset. Once you begin thinking about money in a positive way, you will be on the path to achieving your own wealth.
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Easy Household Budgeting Strategies
Most people live paycheck to paycheck, and spend what they want whenever they want. But if you keep up that pattern long enough, you’ll soon discover that the money runs out before you’ve paid all the bills, and there is never any left over for special purchases or holidays. To get control of your household spending and start saving you will need to set up a household budget.
The thought of having to stick to a budget might make you cringe. It sounds restrictive and boring. But if you are serious about creating wealth, a budget can actually give you freedom. You will have control over your finances, know where your money is going, and have a plan to reach your financial goals. Not spending on a few things that you can do without right now means you will be able to spend on larger, more important purchases in the future.
Here are some easy household budgeting strategies you can use to get started.
Find out how much you earn.
The way you’re paid can determine how you budget your money each month. If you’re paid on a weekly basis, you can calculate your budget based on four paychecks a month. That means you’ll have four extra checks throughout the year to help with extra expenses. If you’re paid bi-weekly, you can calculate your budget based on two paychecks a month, and have two extra checks throughout the year. If you’re paid monthly, calculate your budget based on the monthly amount. You won’t have extra checks throughout the year, so you’ll need to be careful in budgeting for the extras. For those who aren’t paid regularly, figure out your annual income and divide it by 12 to determine your monthly income.
Track your expenses.
Your fixed expenses will be easy to figure out. These are the items that stay the same from month to month, such as your mortgage, car payment, and the like. Your other expenses can be trickier to calculate. To find out how much you really spend in a month, carry a notebook with you and write down everything you spend for the next 30 days. This will tell you how much money you’re spending, and where it is all going.
Figure out the difference.
Now, find out the difference between what you spend and what you earn each month. If you have a surplus, a portion of that should be budgeted for investments or savings. If you have a shortage, you have one of two choices to solve your budget woes: lower your expenses or increase your income. You may even want to do both.
Lower your expenses.
Lowering your expenses is the most obvious way to solve a discrepancy between your income and your spending. Simple changes made over time, such as renting a video instead of going to the movie theatre, can add up to big dollars in your bank account. Others may be lifestyle changes, such as giving up one car and taking public transportation instead.
Taking control of your finances by setting up a household budget is an important first step to creating wealth. As you begin to make wise decisions about where your money goes, over time you will find opportunities to spend less and have more money to invest.
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Fun and Frugal Family Outings
The time we spend with our families is priceless. But most popular family activities are quite expensive. Even a simple night at the movies can put a serious dent in the budget by the time you buy tickets, popcorn and drinks for everyone.
Fortunately, there are cheaper alternatives to expensive family outings. They provide the opportunity to have just as much fun at a fraction of the cost. Some are even free.
Movies and Music
Kids are often itching to see the newest releases at the movie theater. Doing so even once a month, however, can get pricey. One alternative in some areas is the drive-in. Admission is usually much cheaper than it is at a regular theater, and some let you bring your own drinks and snacks. Drive-ins usually show fairly new releases, so the kids can say they saw something that’s not out on video yet.
Some theaters offer reduced-price matinees during the day. Some even have free kid-oriented movies on weekend days. These options offer the theater experience without the outrageous cost.
Kids often want to go to concerts, but tickets to see the most famous bands are far from cheap. Check your local paper for free concerts in the park. Many areas have them during the warm months. Young children can enjoy the music without the huge crowds and deafening sound systems, and older children might gain an appreciation for less well-known bands.
The Great Outdoors
Nature offers a wealth of possibilities for family outings. Camping is a wonderful activity for families, and it doesn’t have to be expensive. It can be as simple as pitching a tent in the back yard, or you can spring for a camper and rent space at a campground. Bring the grill and some hamburgers or hot dogs, or catch some fish to fry.
Parks are great for day trips. Those with playground equipment can keep youngsters entertained for hours on end. Hiking trails offer opportunities for exercise and exploration. Most parks have picnic facilities, so you can pack a lunch instead of eating out.
Other Ideas
Here are some more inexpensive family activities to consider:
* Play miniature golf. Admission is usually quite reasonable, and it provides the opportunity for relaxed yet engaging family competition.
* Visit a petting zoo. These small zoos do not have the exotic animals you see at larger ones, but kids can feed and pet the animals.
* Go to a museum. Some offer cheap or free admission, while others cost more. But the larger and more expensive ones often sell season passes, so if you live close by, you can visit numerous times for one low price.
* Go boating. If you’re fortunate enough to live near a body of water, boating is fun and relaxing. Canoe and paddleboat rentals are inexpensive, and when you’re done boating there are usually other cheap or free activities in the area.
* Attend events at a nearby college. These may include plays, concerts, dance recitals and movie showings. Prices are low, and student discounts usually apply to kids, too.
Having fun as a family doesn’t require a six-figure income. If you look hard enough, you can find lots of free or cheap activities that parents and kids can enjoy just about anywhere.
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Debt Management Help
Debt has a way of creeping up on us if we let it. It’s important to keep our debt at reasonable and manageable levels, or we could end up incurring insane interest charges and scraping to make our payments. Even for those who manage debt well, unexpected life changes can result in difficulty making ends meet.
When we find ourselves having problems with debt, the first course of action is to take a look at the budget. Finding ways to cut back on unnecessary expenses can help us pay down debts and keep monthly bills current. But what happens when we can’t solve our debt problems with budgeting?
Sometimes we need outside help. It’s hard to go to someone else when you’re having money troubles, but if you don’t gain control over your debts, your credit rating will suffer. So it’s important to take charge before it’s too late.
Some debtors turn to debt consolidation as an answer to debt problems. They transfer high-interest debts to a lower interest credit card, or they put up the equity in their homes to get the money to pay them off. While these options can provide lower payments, they are not without drawbacks. Closing numerous accounts and putting all of your debt into one account can negatively affect your ratio of debt to available credit, lowering your credit score. And if you use your home equity to secure the money needed to pay off debt, you’re putting your home at an unnecessary risk.
Another popular option for those with debt problems is credit counseling. Credit counseling agencies offer help with budgeting, and in some cases, they will set you up with a debt management plan. A debt management plan involves negotiation with creditors to obtain lower interest rates and lower payments. The debtor makes one monthly payment to the credit counseling agency, and the agent forwards payments to each creditor.
A debt management plan can help you get out of debt faster, but it can also impact your credit. A note is added to your credit report stating that you are undergoing credit counseling. This means that you can’t get new credit. However, the notation is removed once you’ve paid off your debts.
It’s also important to make sure you’re dealing with a reputable credit counseling agency. Some charge high fees or fail to make payments to creditors on time. There have also been some that were found to be outright scams, keeping the money that debtors sent them to pay their bills with. When considering credit counseling agencies, make sure they’re members of the Association of Independent Consumer Credit Counseling Agencies (AICCCA) or the National Foundation of Credit Counseling (NFCC). These organizations regulate and monitor member agencies, making sure that they operate legally and ethically.
An overabundance of debt can wreak havoc on our finances and our credit scores. It can also be the cause of undue stress. By seeking help at the first sign of trouble, we can often prevent our debts from spiraling out of control.
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Credit Repair Tips
In some cases, bad credit is a result of irresponsible money management. But it often occurs because of unexpected financial hardship. One day you might have all of your bills current, and the next you could become disabled or lose your job. And if you fall behind on your debts, it will wreak havoc on your credit rating.
Credit repair agencies claim that they can remove bad entries from your credit report. But did you know that you can often have them removed yourself at a much lower cost? There are two methods by which you may be able to get negative entries removed from your report.
Option #1: File a Dispute with the Credit Bureaus
The Fair Credit Reporting Act (FCRA) requires credit bureaus to investigate any item on your credit report that you dispute. If the information is found to be false, inaccurate or unverifiable, it must be corrected or removed from your report. The bureaus have 30 days from the time they receive notice of the dispute to complete their investigation.
If there is any inaccurate information on your credit report, a dispute is certainly in order. But some people have had luck disputing items that were in fact accurate, including judgments, collections accounts and repossessions. If such items are not verified by the creditor (or the court in the case of judgments) within the time limit for investigation, they must be removed.
If you decide to dispute a legitimate entry, simply write a letter to each of the credit bureaus stating that you dispute that entry. No explanation is required. But keep in mind that if the entry is verified, it will remain on your report. And if the creditor verifies the information after the 30-day time limit, the credit bureau may reinstate the entry as long as they notify you at least 5 days before doing so.
Option #2: Negotiate with Creditors
Dealing with creditors can be intimidating, especially if you’re not on good terms with them. But speaking to your creditors directly may help you get negative information removed from your credit report.
If you only have a late payment or two on your account, a creditor might be willing to remove the derogatory information once you’ve resumed a regular payment schedule. If you’ve experienced repossession or had an account turned over to collections, payment in full might persuade them to remove the negative entry. It sounds like a long shot, but you never know until you ask. Requests to remove late payment information may be made after you’ve brought you account current. But if you’re hoping for removal of a repossession or collection action, it’s best to negotiate a deal before you pay anything.
If You Can’t Get the Bad Entries Removed
There is no guarantee that disputing information on your credit report or negotiating with creditors will get negative items removed from your record. If it doesn’t, the best thing you can do is try to build up some positive information on your report.
The first thing you need to do when trying to rebuild good credit is bring past due accounts current. Try to work out a deal with your creditors to accomplish this, or talk to a credit counseling agency. But don’t miss payments on current accounts to put money toward those that are past due. If it comes down to paying one or the other, keep the current account current.
Once you’ve brought all of your accounts current, put a priority on keeping them that way. Making your payments on schedule will raise your credit score, and with the passage of time, the good entries may outweigh the bad.
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How to Create a Family Budget
For singles, creating a budget is relatively easy. They tend to have a good handle on how much money they have coming in, and when tracking expenses, they only have their own to think about. But creating a family budget is a whole new ball game.
Most families have multiple sources of income. And when there are multiple spenders, that makes things much more confusing. This is one of the main reasons that families lack a formal budget. But having a budget and sticking to it can greatly improve a family’s financial outlook.
Making a family budget may be tricky, but it can be done. Here’s how.
1. Take inventory of all income. If a certain source of income fluctuates from month to month, use the lowest amount or average it out.
2. Keep track of all expenses for a month or so. Keep all of your receipts, and ask all family members to turn theirs in to you each day.
3. Add up your monthly expenses. Be sure to include bills, debt payments, groceries, and everyday expenses such as lunch money and transportation costs.
4. Get the family together and discuss ways you can trim the budget. Getting input from other family members will help you determine which expenses are necessary and which ones could be cut down or eliminated. Maybe you or your spouse could start taking lunch to work instead of eating out, or maybe the kids can drop an extracurricular activity.
5. In addition to individual expenses, discuss how you can cut down on the electric bill, groceries and other necessary family expenses. Consider such things as carpooling or taking public transportation, buying more generic foods and adjusting the thermostat.
6. Estimate how much you can save on regular expenses, and cut the completely unnecessary items out of the budget. Then refigure it and see where you stand.
7. If you end up with a surplus, allocate a portion of it to savings. If you’re in the red, go back and rework the budget until you have more income than expenses.
Being Realistic
One reason that family budgets often fail is because they’re just not realistic. It’s great to cut down on expenses, but sometimes we tend to go too far. For example, cutting entertainment out of the budget completely might look good on paper, but we all need a little diversion every now and then.
Instead of cutting such things out of the budget completely, consider finding ways to lower the cost. Going back to the entertainment example, maybe you’ve been going to dinner and a movie as a family twice a month. But eating in and renting a new release would be much cheaper, and you would still get to spend quality time together.
Individual expenses can also be tricky. This can be resolved by allocating a certain amount for each family member to spend each week. If someone spends his entire amount before the week is up, reevaluate his expenses and adjust if necessary.
Creating a family budget can help keep spending under control, leaving more money to pay down debts and save for future goals. But in order to succeed, close monitoring is essential. Your efforts will be rewarded, however, with less financial stress and more money in the long run.
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Get Control of Your Finances Steps You Can Take
Get Control of Your Finances Steps You Can Take Today
Your finances determine many important things in your life such as where you live, how you live, and what you’re able to do. So, it is very important that you get control of your finances. Here are some steps you can take today to start taking back control of your money and get on the path to creating wealth.
Start tracking your spending. The first step you need to take when taking control of your money is find out how you’re managing your finances right now. Where does your money come from and where does it go? You may be surprised to learn that how you think it’s being spent is often different than how it is actually spent.
To find out where your money is going, begin tracking it right now. Your tracking system can be as simple as a notebook page with columns, or you may want to set up a software program to help. Then write down all the money you spend as soon as you spend it. Don’t let guilt keep you from making entries. This step is meant to help you find out the truth about where your money goes, not judge your spending.
Set up a budget. If you don’t think you can follow a budget, think of it as a spending plan instead. To get your finances on track and start saving, you will need to spend less than you make. Write down where your money is coming from and on what dates you are paid. Then figure out how much of that money is spent on bills and other necessities. Write down how you will spend the remainder.
This is where you may realize you need to cut out some expenses so you can stay within your budget. Remember to plan ahead and put money aside for large purchases. Your needs will likely change every few months, so review your budget or spending plan regularly.
Start saving. The wealthy save a portion of their income so they can invest it and watch it grow. However, most of us aren’t accustomed to saving. We spend our money as quickly as we get it. To begin saving money today, contact your bank about arranging a regular automatic transfer from your account. Saving 10% of each paycheck is a good goal to strive for. While you’re getting used to the idea of saving, you may want to start out by saving 5% of each paycheck and build your way up.
Put away your credit cards. If you have your credit cards with you when you go shopping, you will probably use them. Eliminate your credit cards as an option by putting them away or even hiding them. If you remove them as a temptation, you will force yourself to live within your means by spending only the money in your bank account.
Ask your credit card companies for lower fees. Pick up the telephone and ask your credit card companies if they can work out a lower rate for your credit cards. Usually they will try to help you because it hurts both you and the credit card company if your debt goes to collectors. A lower rate means it will cost you less to carry the balance while you pay it off.
You can gain a lot more control over every aspect of your life once you control your finances. By following the above steps, you will be on the way to getting that control.
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Compound Interest Money CAN Grow On Trees
The rich seem to keep getting richer without having to work harder than anyone else. But just how do they do that? One of the secrets the wealthy use to create more wealth is to invest their money wisely. In fact, they even earn more money from the interest on the money they’ve invested. Surprise! Money can grow on trees after all.
You can do the same with your money by depositing it into accounts that pay compound interest. Here is how compound interest works and how it benefits you and your finances.
Let’s begin by looking at how basic interest works. Basic interest is paid on the amount deposit into your account. Even when interest is applied and the amount in your account grows, the interest is still only applied on the principal the amount without the interest. You won’t earn a lot this way because you’re only earning interest on the principal amount.
It is much smarter to put your money in an account that pays compound interest. This is where you can really watch your money grow, and make more money from your initial deposit.
Compound interest is basically interest that is collected on the original amount you deposited plus the interest that has already been applied to that amount. So, whenever interest is applied, the amount of interest is added to the principal for the next time interest is applied. Unlike basic interest that is applied only to the principal, compound interest is applied to the entire amount in the account, not just the principal. The act of applying interest is also known as “compounding.”
Your money can earn more in a compound interest account than in other types of accounts because you’re earning interest on a greater amount of money each time the interest is compounded. This is a very smart way to invest your money and watch it grow and even double.
You can find out how long it will take your money to double in a compound interest account by applying a very simple calculation. Take the interest rate you’re earning for your money and divide it into 72. For example, if you’re earning four percent interest, you would divide four into 72 and learn that it will take 18 years to double your money. If your money is in an account that pays six percent compound interest, it would take 12 years to double your money.
These examples illustrate how your money will be compounded on an annual basis. Some financial institutions will compound your interest on a more frequent basis, such as quarterly or monthly. Some even compound it daily.
Putting your money in an account that will earn compound interest is a wealth-generating secret you can’t afford to neglect. There is no easier way to increase your wealth than just letting your money sit there and watching it grow.
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