Some lottery winner or celebrity who came into a large amount of money yet who still manages to end up broke. We see and hear about their stories all the time in the newspapers or on TV.
The secret to real financial security isn’t in how much money you make but rather how you manage it. So then what are the top 10 tips that those who successfully manage their money have to pass on?
#1 You need to draw up a budget and live by it. Now this doesn’t mean that you necessarily have to go without just because something doesn’t fit into your budget plan. Rather it’s a plan that you try to stick with, a plan to track and manage your money more efficiently.
#2 Learn to use credit cards to your benefit. They’re a great tool for building credit but are one of the worst ways for actually using it. They have high interest rates, penalty fees and are a great way to mess up your credit if you run into financial difficulties.
#3 Never obtain a cash advance by way of a credit card unless it’s an absolute emergency. As stated above you’ll always find your worse terms with them, and besides if you stick to a budget you should have a debit card that allows you to withdraw your own money interest free.
#4 No credit card is better than a bad credit card, so if you do end up with one or more of them take the time to shop around for the best terms first. If you can’t get optimal terms then only keep a card with less than optimal terms as long as it takes you to use it to build your credit rating.
#5 Don’t make personal loans because once friends and family members come to realize that you are building wealth you’ll become target for a personal loan when they find themselves in need. What they really need in most cases is some sound financial advice so give them that instead and they’ll be better off in the long run.
#6 Do as much of your shopping as you can with cash. Every time you shop with a credit you have to pay interest and over the course of time even interest at a lower rate adds up. Then if you’re paying interest on multiple purchases they can really add up over time.
#7 Make saving a policy and stick with it. This would be a certain percentage that you take out of each paycheck to stow away. Don’t think of the extra money left over after your bills are paid as money to be spent, think of it as money to be saved instead.
#8 Don’t be overly generous. Something that almost all people who have managed to build substantial wealth from scratch tend to have in common is they’re tightwads, and while people around you can be frustrated by your stinginess they will come to respect you for it.
#9 Work to set new priorities with regards to your personal acquisitions. What this means is that you need to re-examine what you really need and want out of life. People who have found real happiness will often tell you that the best things in life money can’t buy, so think before you buy. Are you buying it because you need it? Or are you buying it because you want it?
#10 Seek out a partner who shares your same goals with regards to money management and wealth building. If your partner is intent on spending everything that you acquire then even your best efforts will be like trying to fill a barrel with a hole in. End up with a partner who shares your goal of financial security though, and both of you will achieve it just that much quicker.