The financial secrets of the wealthy actually aren’t secrets at all. If you aren’t lucky enough to either be born rich or win a lottery, you have to do it like most. Planning, discipline, and portfolio management are the ways to get rich. If you can master these, you are on your way. By the way, it isn’t easy or else everyone would be rich.

The first step to planning for financial stability is to look at your habits today commit to changing them for the better. You will be happier, healthier and wiser if you do. Listen. Whoever said “Money isn’t everything”, was probably a rich guy. The saying should be “Lack of money is everything”.

The plan

Now that you have decided to light this candle, you will need goals and a way to achieve them. Pick some short-term goals and some long-term or “stretch goals”. Short-term you may want to get out from under those credit cards or start an investment portfolio. We will help you do that. Long-term you may wish to change your life completely or maybe you just want to experience the great feeling of not having to go to work. We will get you started on that too.

First you need to budget your income and outflows of cash so that you can direct more of it to your future. You have to develop an effective budget plan.  Unfortunately, the majority of Americans do not have a clearly defined budget, and the negative results are seen in the large amount of debt most families accrue.  Without a budget, you can easily spend beyond your means – with no money left for savings. 

How to make a budget

Budgeting is a critical component to prosperity.   It is the fundamental key to becoming wealthier.  If you can balance a checkbook, then you can easily design a budget.  The only three tools that you will need are a notebook, calculator and a pencil. But we are going to make it even easier with some budget tools on this site.

The first step is to list your monthly expenses.  This includes utilities, rent/mortgage, insurance, car payments, student loans, groceries, entertainment, shopping, gas – and even the coffee you buy in the morning.  To create an accurate budget, one has to know how each dollar is spent.

Tracking all of your expenditures may take an entire pay period or longer, even a month or two. In order to create and maintain a budget, you might consider keeping all of your receipts; at least until you get a handle on things. It will probably blow your mind when you see what you really spend. The question, “Where does all of the money go?” will finally be answered and it might shock you. The money that is hardest to account for is the cash that is spent on morning coffee, lunch, convenience store purchases, cigarettes, or movie tickets.  Cash slips away easily, without any means of accounting for it.  It seems that you must have a hole in your pocket or something.

Once you have an accurate record of how much money you spend in a month, it is time to create a budget chart. Make a row of columns on a piece of paper (or use a budget calculator) and label each column with your expenditures, such as electric, water, mortgage, car payment, entertainment, etc.   Also, break down your credit card bills so that you don’t miss the detail; it is important.

Combine all of your minor expenditures, such as your daily cash purchases, into a miscellaneous category.  Once you have made a column for each item, you will be surprised at how much money you spend; probably more than you make.

How to improve your budget

If you would like to become wealthier, the most important line item in your budget is: savings.  It is very difficult to get ahead when you are living paycheck to paycheck, without any savings in the bank earning for you.  Even an individual on minimum wage can budget in a monthly savings amount, which eventually translates to thousands of extra dollars.  

Although it may seem like savings is a daunting task, putting additional monies into your savings account is actually quite simple.  Spend less, and save more.  This does not require you to become a spendthrift, but instead cut out small, unnecessary expenditures.

For example, during weekly movie theater nights, avoid purchasing soda and popcorn, which can easily cost $40 for a family of four.  At the end of the year, your savings account will enjoy an additional $2000 simply by skipping on the popcorn.

You can find easy ways to cut budget corners with many of the categories on your budget chart, especially with entertainment and shopping. 

The rich become wealthy because they are smart with their money.  In order to have wealth, you must first learn how to save money.  By creating a budget and making a few adjustments to your spending habits, you are well on your way to becoming wealthier.  In fact, in only a few months, you can be thousands of dollars richer.