Accumulate Wealth in 7 Easy Steps

We are told time and time again as Americans we spend more money. Everyone complains that only if they had more money, their problems would go away. We all know that is not true. It might solve some problems but not all our problems. How many times have we heard those who won the lottery are poor within a couple of years? We think to ourselves, "that would never happen to us".

How could the winners lose all that money? Simple! It is a lack of discipline and education (not the education of scholastic aptitude) but a lack of financial education and as I said before discipline. Remember it's not how much you spend but how much you save that is important. Let's take a look at some simple steps to put money back into your pocket.

Step 1-Your Car

The price of gasoline is rising. Sure it has come down in the past few months but if you compare the price of gas this year to last year we are still paying more. No, I am not asking you to give up your car or ride a bicycle to work (although it would be better for your health, just not practical). If you are driving a big vehicle and you really do not need it (i.e. for work), sell it and get a smaller vehicle. Obviously, if the car is paid off keep it. But you still might be able to spend less money with a smaller vehicle especially with respect to repairs and gasoline.

Step 2-Analysis of your budget

What is your household overhead? The term "overhead" is used in business quite a bit. Overhead is the day-to-day cost and monthly/yearly cost of operating your household. You would be amazed at how many people do not know what it cost to "operate" their house. They think they know until they actually put pencil to paper and write out every cost. They are usually very surprised how much money is actually wasted and where it all goes. And it goes pretty damn fast.

Step 3-Your house or apartment

After performing a budget analysis you will probably realize you spend a lot in electric, gas and water. One way to save is to get on a budget plan with the utility companies. This could create an immediate savings. If you live in a cold place, putting in additional insulation for windows and doors are helpful in keeping the place warm. You can also wear an extra sweater and keep the heat lower. If you live in warm climates, install a ceiling fan and use it more than an air conditioner. These small steps will help to decrease the monthly utility overhead.

Step 4-The Groceries

This is a tough one. You want to eat healthy but there are rarely coupons for healthy food. Ever notice the coupons are all for box or canned items. These items are loaded with bad ingredients from partially hydrogenated oils to significant sodium content. One of the best ways to decrease your grocery bill is to make healthy snacks at home and take these snacks to work or school. It is much cheaper to take/pack your lunch everyday versus buying lunch. Once awhile is okay because you do not want to be antisocial. But just think about the savings by packing your lunch. If you go out to eat 3 times a week and each time costs you at least 6 dollars, that is $6.00 x 3 = $18.00/week. Let's take $18.00 x 50 weeks (vacation, sick days, holidays) = $900.00/year. That's a lot of money. Another way to decrease your grocery bill is to decrease your eating portion, which you should do any way for health reasons. In other words you won't be buying as much.

Step 5-Health Insurance

You are lucky you have health insurance. You might even be luckier and have an employer pay towards your health insurance. Enjoy it while you can because I feel the future is bleak on Americans continuing to be able to afford health insurance. Have you noticed your co-pays are increasing or you now have co-pay and a co-insurance? So, how do you save on health insurance? Look at HSA (Health Savings Account) or MSP
(Medical Savings Plan). These plans are tax-deductible plans. These plans are too involved to explain in this article but begin your research of them if you have to pay for health insurance out of your pocket.

Step 6- Credit Cards

Credit cards are great in times of emergency. If used for immediate gratification the interest rates will eat you alive and you will be buried under debt. If you can't afford something and you need to put it on a credit card (and it's not an emergency such as a trip to the hospital or bill fixing your car so you can travel to work) don't use it. Delay your gratification. You will feel better (mentally and financially) if you wait and pay cash for the item. I know we have to build a good credit history but there are smarter ways of improving your credit versus purchasing a must needed $5000.00 plasma screen television set.

Step 7-Building your nest egg

There are many vehicles today to grow your money. How you invest will depend on your age, debt ratio and income level. It is also easy today to attain information on how to invest. I wish I started at a much earlier age. There are certain tax advantages to investing whether you're investing in Bonds, Stocks, CD's or Money markets. While doing your research on saving/investment vehicles just save the money in your local bank. The idea is to just begin saving. I once read if you can learn to live on 50% of your take home pay you will be very prosperous. Well, I don't know about you, but I cannot live on only 50% of my pay. Could I save $10 or $20 a week? That is surely possible. Again, if you take a look at your budget and operating costs to live and run your household you will see if you skip a few things and budget properly you could easily save an extra $10 or $20 a week or a month. Ever notice that although our cable bill increases we somehow find the money to pay for it. Just think about it. The first step is to begin.

Learn how to take the first step. Remember small changes over time lead to bigger changes in your life.

If you would like help in your decision I would be glad to help…(65)9746 3061

Regards,

Kannan (AFP)

HP : (65)9746 3061