Most people think that the rich are rich because the are just lucky or that its God’s will. While its true that some people are born into wealth and many rich people often do get lucky breaks, most people who are rich worked very hard at becoming so.
1 – Have a budget and stick to it
The rich know where all of their money goes every month. If you don’t know where you are now, then you can’t possibly know where you are going. Sit down and list out all of your expenses. Make sure to include everything. Then begin tracking your spending. An easy way to do this is to use online tools such as Mint to track all of your purchases and expenses. Mint can connect to your bank account and automatically download the transactions. They also have apps for both Android and IOS. This makes tracking your expenses while on the go much easier.
2 – Spend what you earn very wisely
The first step is to be very careful how you to spend the money you earn. Many of us live from pay day to pay day. Have you noticed how so many malls here have pay day specials? These are marketing tricks to encourage us to come and spend our money on things we don’t need and won’t make us happy. Are there times you could skip the taxi and ride a jeepny instead? Do you need that Starbucks this time? Of course I am not saying you can’t enjoy your money that you worked hard for. But the question you need to ask yourself is this – will this I am buying now help me reach financial independence or will it keep me a slave to my money? If you can get into the habit of asking yourself that before your purchases, you will quickly gain control of your money.
3 – Save your money and invest it
Ok so you have begun to save some money by spending your money more wisely. Now what? While you need a savings to protect you from life’s emergencies, you also need to start your money working for you. There are many ways you can do that here. The easiest way is to open an investment account with one of the larger banks such as BPI and BDO. They have basic investment accounts that you can put a portion of your monthly income into and start investing quickly. Another way is to start your own business. There are many options available to you there. Just think about the type of small business you might want and begin to develop it Another option is to make personal loans to your friends, co-workers. etc. The interest you earn will help your money to grow.
4 – Set financial goals for yourself
So you have your budget, you have some savings, and you are also investing. Now you need to set some goals for yourself that will stick to these principals. Want to travel abroad? Want to retire young? Want to buy a car or even a house? you can do it all by setting a goal and then having a plan to reach it. Just keep to your budget and you can reach just about any financial goal. Mint can also help you with this. It allows you to set gials and helps you see just how well you are doing to get to it.
5 – Don’t waste money
Yes this can is similar to spending your money wisely but it deserves its own section. How many times do you waste money by not paying your bills on time? Late fees are just one area where a lot of Pinoy waste their money. Its just like throwing the money into the toilet. Late penalties on personal loans, overage charges on mobile phones, disconnect fees on electricity all will eat up money that you could be saving or investing to help you reach your financial goals.
What are you waiting for?
These 5 tips will hep you to get out of the cycle of living pay check to pay check. Get started today. Remember when Noah built the ark? Before the rain. No time like today to get started.