For most people getting out of debt is little more than a pipe dream. Creating a personal finance plan that includes a savings plan and a retirement plan are a venture that few are prepared to tackle. We all too often tell ourselves that we lack the funds necessary to achieve even a small part of what we want. We will look at the 4 steps necessary to achieve our financial dreams.
Creating money by reducing expenses
In most cases your current expense has done nothing but grow month to month. Every three months you should look at every expense that you have and find the waste. Things like upsizing every special value meal at McDonalds when you eat out. Sure it is a good buy but if you eat out every day that adds up to $32 per month on average. Electric bills can be reduced by $10-$15 per month just by small moves in the thermostat and turning out lights. A pack of cigarettes a day is costing you close to $4000 per year or $40,000 in 10 years. Not to say anything about the added expense to your healthcare.
Give your Personal Finances a reevaluation
Look at what your financial goals are. Most people set very modest goals and if they come up short they put themselves at risk. People take the advice of people who are just getting by themselves and guess what that advice will do for you. Yes, just get you by too. Look to people who are super successful. Why do you think super successful people turn to Warren Buffet for financial advice? Who does he turn to for advice, Bill Gates of course?
Build a plan that will give you everything that you want and more and if you come up just a little bit short, you will be living the life that the others are still dreaming about. Remember somebody has to live on that beach or live at the top of that mountain.
Free up Money sooner rather than latter
Have a plan to pay down debt. Remember just a few extra dollars a month on every bill will rapidly destroy the balances. Pick the low hanging fruit and pay them off first. Take the money that you have found by cutting expenses and apply it to the smallest balances first. There are a lot of ideas about how to do it but you must keep it simple to make it work. Learn to live without borrowing. When you borrow you are just building someone else’s future at your own expense.
Pay Yourself First
No matter what you do make sure that you pay yourself first. Remember this is your personal finances that you are trying to grow. If there is any way possible that you can have the money automatically taken out of your account that is the best way. Simply take the first 10% of the gross amount that you make and put it in a 401k or some other financial device that will grow rapidly and be harder to touch the money. This is your retirement plan for the future. You will need that money when you are living out your dreams.
To find out more great tips for your personal finances and great advice on how to prepare a retirement plan and a savings plan see the resource box below.