- Spend Less Than You Make = Wealth
No matter how much money you earn, this is true. The less you spend, the more wealth.
- Define wealth as having a balanced allocation and strategy for your financial goals.
- Make sure to know your numbers, percentages, and saving/spending habits.
- Study and get comfortable your finances even if it is ugly to look at.
- Fall in love with your numbers even if its never perfect, treat it gently, and have patience.
- Become obsessed with always lookig for ways to improve.
- Aim to keep your essential expenses at no more than 50% of your income.
- Save the remaining percentage minus taxes. (Ideally 30%).
- Don’t be discouraged if you are not even close to that, but start soon.
- From that percentage of savings, divide the amount into buckets.
- Some buckets might include retirement, investments, cash savings, and dreams.
- Break down all your expenses and savings into whatever frequency you get paid so there is more consistency and you know what to expect each time you get paid.
- Pay yourself first. (This creates the habit and conditions it).
- If you have high-interest debt, add an additional bucket for it and prioritize.
- Personalize this strategy to fit your goals.
Some objectives to keep in mind:
- Build an emergency fund.
- Pay off high interest debt first.
- Adapt this strategy to what works best for you.
- Personalize buckets and balance them.