If youve reached a point in your life where you feel youre not making much progress when it comes to personal finance its time to sit down and reflect. If youre asking questions such as I hate being poor and in debt then you have to realize youre in the position you are now because of the choices you made in the past.
The choices that you made in the last 5 to 10 years have made you poor and get into debt, the good news is that if you take charge of your finances now you still have time to have a prosperous financial future, it will take hard work and discipline however the more effort you put into the cause the better you will become.
The reason I wrote this article other than to make money was to share my experiences, a few years ago I was in a desperate situation and really sat down to question my financial affairs and habits, years later I have made progress and have turned my finances and my fortune around. Here are some of the changes I made and I hope they can help you too.
#1: Get Financially Educated, Increase Your Financial IQ
What Is Financial Planning?
If you might think you know all there is to know about money then youre mistaken. I had a cavalier and arrogant attitude towards money and thought I knew enough on the subject. I was very mistaken, after reading books such as Rich Dad Poor Dad, The Richest Man in Babylon, Think & Grow Rich, and The Millionaire Fast lane, I really opened my eyes. I felt very angry with myself because I knew that if I had taken the time to read these books earlier in my life I would be in a strong position financially.
I would definitely recommend that you start your turnaround by increasing your financial IQ and financial intelligence, try some of the books mentioned above and see how your life changes.
#2: Pay Yourself First and Others Last
Tips on How to Save Money
If youre poor then you probably have the mindset that you only save money with whatever you have left at the end of the month, if you dont have anything left then its a recipe for being poor. After working a 60 hour week, and tolerating your superiors and co-workers hurling abuse at you and waking up at the crack of dawn to make sure your not late for work, the least you can do is pay yourself first, no one else will start saving for you and you need to take charge.
My significant financial turnaround came when I start paying myself first; I then made a commitment to use whatever was left over to get through the month. I decided to pay myself 30% of my monthly income and then use the remainder to make ends meet. It is tough at the beginning and you will have to make sacrifices but it will be worth it in the long run.
#3: Cut Costs on the Things You Hate! Spend More on the Things You Love
How to Budget My Money
Budgeting doesnt have to be harsh and you dont have to cut everything, its merely a way of prioritising whats important and then cutting costs on stuff thats not important and spending more or the same on the things that you value. When I sat down to budget my money I found that I was spending money on magazines I didnt read and paying a monthly subscriptions to the gym which I never use, I was buying too much food and found that I was throwing away a quarter of it.
I was able to find efficiencies and savings on services I didnt need. On the services I did need I called the provider for a better deal which saved more money. I love going to the movies and increased this from once a week to twice a week and I was saving more money at the end of the month. Budgeting is about saving money on things you value less and spending money on things you value more and then saving the difference for the future.
#4: Invest Your Money
Start Investing in the Stock Market
Most people just hoard and save when it comes to their savings, if you can pay yourself first youll be able to accumulate money. Your next step is to make the money work as hard as it can for you, think of money as being your employee and you want to get them to work for you, every dollar that you invest wisely will lead to more money being produced for you.
You can take a hands off approach and invest in mutual funds and index funds or you could take responsibility and educate yourself in investing money successfully. If you can learn to invest my minimizing your downside using insurance you can make a significant amount of money in the long run.
#5: Think Defensively and Offensively
How Can I Get Money Quick
In sports the best defence dont always win, conversely the best offence doesnt win either. When you can masterly combine offensive and defence together synergistically you will make rapid exponential progress. Think of it like a bath tub, youre defence is fixing all the leak and your offence is turning the water on to max, this will inevitably lead to an overflow of water or wealth.
Its hard to be offensive with your money especially at first but eventually youll start to open your eyes and see all the opportunities that you can exploit to make money. Again education is the key; if youre thinking about starting a small business then you should go on a business course, if youre thinking about building an app then buy a programming book, if youre thinking about making money on eBay then network with successful people for mentorship.
You should work a certain amount of time to for normal work and the remaining time should be focused on building another income that you can scale as far as your imagination can take you.
I Hate Being Poor and in Debt
If you hate being poor and in debt then its time to take action, dont be passive and live the life others dictate, take charge of your financial education and make a commitment to being rich and out of debt. It really is in your hand and if god wills you will succeed.