Creating Wealth With What You Already Have

It is a known truth, and emphasized by our current economy, that people have a hard time saving money. Most of the time, most people spend all of their money. They get accustomed to spending a certian amount and varying from this is becomes very difficult. Every financial advisor and personal finance book will tell you the same thing—pay yourself first. It is the best tactic to securing your financial future. But, how do you do it? How can this be done without an insane amount of difficulty? Well, read on.


1. Make your savings automatic. In fact if you can, have it come right off of your paycheck so you don’t even see the money. In some cases your employer or bank can assist with this. Since you never see the money, you don’t even have to make a concious effort to put it away. By paying yourself first you limit your ability to spend that money on other things.


2. When paying your bills, don’t pay them first. Pay yourself first and deposit money into your savings account. Many of us historically have done the reverse and paid for everything else first. The problem with this is, we never seem to have anything left over to put into savings. Simply put, if you wait to pay your savings last, you probably won’t pay it.


3. When you spend, you can save money as well. Purchase items that grow in value. Extra money lying around? Invest it in the stock market. Invest it in paying off your mortgage early. Use it in ways that make you money. Pay off your debts and invest the rest.


When you save money, the key is to really save it. If you buy something on sale, what happens to the money you saved? You probably spent it on something else right?. Nothing really got ‘saved’. From now on, when you save $15 on groceries, put that $15 in your savings account. When you don’t buy a new pair of shoes because you know you need to save, put the cost of those shoes into your savings.


Bottom line is that saving money isn’t that hard. It is simply a habit that has to be learned, just like brushing your teeth. Psychologists say it takes 6 weeks to make an action a habit, so start paying yourself first today and in a little over a month, you will be doing it without a flinch

Culled from:  http://prairieecothrifter.com/2010/07/creating-wealth-with-what-you-already-have.html

Do you want to retire poor?

What a question? who wants to? the truth is that it is likely a lot of people would retire poor if they do not start to plan for their future now!!

If you are still in your 20s or 30s, then you would be in a better position to start to save for your retirement. It might be small sums now but if you actually save and give your money time to compound, then would you realize that you can actually have more by the time you retire. if you are into your 40s, then you are late on your retirement savings and would need to save larger sums to reach your financial goal.


Saving for your your future is very important and only you can be in charge of it. Take control now.

Cheers.

YOUR MONEY OR YOUR LIFE!!!!

How do you value your money in relation to your life? Well for some of us, life is not to be taken too seriously while to others money is a defining factor. One thing we all agree on, explicitly or implicitly is that ‘Money is something we choose to trade our life energy for’. When we work, we trade our life energy for the money we make.

It is worthy to note that whatever we earn at the end of the month, we have actually traded our life energy for it. For instance your monthly pay is N70, 000. In real value terms you have traded a month of your life for less than N70, 000 because you would pay your tax, buy office clothes, food for the home etc.

One thing is certain; you need to trade your energy/time for money as that ensures continuous survival but it really mustn’t be at your detriment. Ensuring that your lifestyle is proportionate to your money is really important so as to not be tempted into illegal acts.

As we all know, time is money. Endeavour to use yours well

Cheers.

How to manage your finances during tough economic times!!!!

 Knowing how to manage your personal finance can help alleviate pressures you would feel during tough economic time such as economic recession, general strike, natural disasters etc. Most importantly it will help you prepare for tomorrow’s challenges and help prevent making the same mistakes.

The very first thing that you need to know if you don’t already is to save, save and save. You must have a reserve fund to always fall back on. If you don’t, start one immediately. A reserve fund provides your future a safety net. There are a lot of rules about how much you need to save continuously but the generally acceptable one is that it should not be less that 10% of whatever you earn. What you must realize is that , there is never a period you can stop saving. It is a lifelong process that is very beneficial. Having too much money saved is not a problem; all you need to do is to take the excesses for investment or consumption.

Run your household like a business. During economic growth you will distribute profits while during economic downturn, you adjust accordingly by reducing you expenses to ensure you survive the period. There will be a freeze on employment, reduction in allowances or even layoffs. Once they have adjusted and have freed up more money, companies can invest in undervalued assets and thereby preparing for the future.

It's time to take charge of your finances.

WHERE DID THE MONEY GO?

Have you ever asked yourself this question? I guess we all have, at one point in time. We brought a fat envelope stuffed with N500 or N1,000 bills home and kept it in one of the drawers at home, maybe the bedside locker.

We have a general idea of what we want the money to accomplish, but don't exactly have a written list. Possibly the money came unexpectedly, or is even our dear pay packet.

Then the party begins. Wifey needs this, the mechanic is at the gate, he needs money to replace this component in your old reliable jalopy. Your sons shoe is undersize, your daughters school bags is worn out. On and on it goes...

A few days later, you peek into the much depleted envelope. Four miserable notes stares back at you. You hold back a scream...

WHERE DID THE MONEY GO?

To make matters more interesting, there are still items in your mental To Do list yet to be attended to. Possibly you came to the envelope to get money when you stumbled on a near empty envelope. The money is virtually gone, there are things waiting to be done. The month is still young. If it is your salary, your take home pay has abandoned you midway home. You need to figure out how to make it to the next pay day.

The crux of the matter is that you are not in control of your cash flow. You are simply going with the flow. You don't have a working budget (you may have a beautiful document left somewhere in the house, you don't know where) or spending plan. You are responding to external stimulus. You are not acting, you are reacting, and emotions has a lot to do with your spending.

 

We all have different levels of discipline when it come to handling money, hence there is no formula that fits all. Since I tend to be weak and emotional in that area, I police myself by making sure that the money departs immediately to their husband's houses before they get to me. I marry them off. I issue post dated cheques to my stockbroker and funds manager at the beginning of the year for the amount I have earmarked for each. Since I don't want EFCC to arrest me for issuing dud cheques, I transfer the money to another account by standing order (where I issue the cheques from). Same with school fees, I have a school fees account, and a savings account. So the moment my salary hits my account, they start heading off in different directions immediately (to their husband's houses) without saying goodbye. That way, I am paying school fees, saving and investing without lifting a finger. I only call my stock broker to tell him which stock to buy. The money is already in may stockbroking account. When it is time to pay school fees, I simply head for the school fees account and withdraw the amount needed, I don't rack my brain and start running helter skelter to figure out where the money is coming from.

Same thing with other expenses, I pick everything for the month. Hence a few days after payday, I am left only with money for discretionary spending. If you come and tell me you father is in hospital overdue for discharge, and you need to borrow money to help settle the bills, there is nothing much I can do. It is true pay day was a few days ago, but the voucher has been closed and the cash all gone to their various places of assignment.

If you are much more disciplined than I am, you can have the money sitting in your salary account, and disburse it according to budget. You only go to the bank with a list of what you need the money for, based on your budget, with no room for impulse.

If London bridge is falling down, repair it with money earmarked for such purposes. If it is important enough, you must have started putting money aside for it. Of course once in a while, unforeseen emergencies come calling without notice. Sometimes the scale can be such that it wipes up your reserves. This is understandable. However, if it happens every month, then there is a problem with your financial planning.

The crux of the matter is control, gaining control of your spending. Imagine your economy is like an airplane, you have to make your way to the cockpit, remove it from auto pilot and take over the controls, whatever it takes. It will not happen overnight. It you are thousands of miles off course, it will take a while and some doing to get back on course, but you can do it.

Having a short term and long term goal helps in galvanizing focus. Most people complain that they don't have money to start a business, workers inclusive. The easiest and cheapest source of funds for a business start up is personal savings. The interest rate is 0%. Maybe you want to build a house, go back to school or whatever. Having a focus helps move you along the road to financial discipline, if you can come to the understanding that a dripping tap can fill a bucket. If you can gather all the money that has been dripping out of your hands in one place, you will be amazed how much it amounts to in one year.

So where did the money go? Witch rats from your village did not spirit it away. Chances are that nobody in your flat or house is stealing it. If you religiously itemize every amount you collect from that envelope, you will see clearly where it went. It will simply add up, though you may not see what it has achieved. It simply grew wings and flew away because you did not send it on any specific assignment. You allowed them to loiter away. Look at money as your servants, and give them assignments before you leave home, you will see that you will get results.

 If you allow them to roam free, you will continue wondering where the money went...