So this is it! No more backing out on your goal. You have said it and you will do it. But how? A little extra cash would be great. And where do you think that will come from?
Everyone has their own goals but one part is always common. Everyone wants to be richer than they currently are. You can either have a man to man talk with your boss regarding an increment, or you can play a lot of poker on New Year’s Eve. Both ideas work great, only in case you get lucky. Yet, getting rich is more about being wise than being lucky.
The best path to riches is managing your personal finances wisely. Personal Finance management includes every aspect related to money starting from earning it, saving it and investing it. Following the right path, we have seen true stories of people going from rags to riches. All of them have a different story but most of them share the same secret.
Now, this is where you get lucky as we share the top five secrets for getting rich.
1. Penny saved Penny earned
The best way to get rich is not just to earn but to save. Saving is a very essential part of budgeting. It is better to plan how much you want to save each month. For some people, it could be a little difficult to resist spending while they have some money in the bank. The best way to overcome this temptation is to consider your total income as the actual amount minus the amount you need to save. For instance if you earn $8000 and want to save 1000$, make yourself believe that $7000 is what you actually earn.
2. Invest and Increase
Let’s continue the above example. Now that you have your budget planned under $7000 and $1000 is in
your bank, what if you again feel the urge to spend it? What if the currency loses its value with time? What if the inflation rate rises beyond expectation? You need to find a way to get that amount increasing with time. You can increase your income by investing a part of it in some money generating venture. You can invest in bonds, stocks, real estate, gold and other investment opportunities. This can greatly control your temptations for spending your money needlessly.
3. Spend Wisely
You can’t save or invest all of your money. After all you are a human being and you have got needs. But then you have wishes too. Separate your wishes from your needs. A financial statement gives you a better idea of where you are spending needlessly and where you can cut down such expenses. For a DIY financial statement, lists down your monthly income and expenses. The sum of all incomes must exceed the sum of all expenses. The difference between the sums must be enough to cover the amount you need to save plus a little more for unexpected emergencies. The best way to avoid needless purchases is to avoid using your credit card unless extremely necessary.
4. Alternate Income
A little extra money is a blessing. Like investing, alternate jobs can really help you in increasing your monthly income. The easiest way is to do some online work. There are lots of opportunities available online. You can be a freelance writer, consultant or even get involved in online marketing. You can also start providing services such as child care and gardening. There are many people who started out with such part time alternate jobs and turned them into a full time business venture.
5. Set Goals
The most important secret shared by all the money gurus is that they all had a goal. You need to set goals regarding what you need to achieve. It can be a simple goal such as a vacation plan, buying a car or a bigger goal such as buying a house, getting to college, etc. Setting a particular goal will help you in determining how much money you need to save each month. Therefore, the whole budgeting process becomes easier and systematic.