By now, many have a good idea of what the first step to becoming wealthy is; smart spending.
In itself, smart spending would include:
- Knowing where your money is going
- Knowing why your money is going where it’s going
- If there is waste spending, be willing to admit it and make necessary changes to stop it
- Identify spending habits that will help to make necessary changes that help with changes
- Begin planning ahead when knowing spending will be taking place
- Learn the good sense of spending appropriately
Moving forward, we’ve learned from all this where we’re able to cut back and where to save on when we spend our money. This will lead us to have money left over after each paycheck at the end of the month. The question now is what to do with that leftover?
Some or our initial tendency will be to go and spend that extra money on something that we’ve been working all month to keep from purchasing in the first place! This is what we’re at the most wanting to avoid doing all over again.
As you research, others you will find may make two initial recommendations; put ten percent of your income aside into a type of account that you don’t touch and allows you to save the money and put ten percent of your income toward charitable donations.
Even though I do agree with what this is recommending, there are some things about it that I will suggest in a way that I feel helps us to become more accommodating with this change depending on our own specific circumstances.
For instance, if we’re already struggling to make our ends meet paycheck to paycheck by just cutting some of the excess we start to see a little light that can now be applied to pay off some of the credit cards or loans. Then let’s take care of these things first to lessen the pain as quickly as possible before storing extra amounts away.
At this point we’re trying to not only keep our spending in order, but also to now lessen any amount that we owe to others. To do this we should take as much of this new extra money that has been made available through removing wasteful spending and applying that to a specific credit card or loan that we owe on.
Some might suggest targeting the one with the highest interest rate. Myself, I prefer to start with the one with the lowest amount due. This allows us to begin getting rid of payments to the number of different accounts as quickly as possible. As we begin to see them disappear this helps to show us making headway on what we’re trying to accomplish while also feeling good in ourselves.
Ultimately, we’ll be continuing to pay on all the accounts and will pick up payments on the high interest ones also, paying them off much quicker that we otherwise would have.
If we hadn’t done anything, we wouldn’t have been putting money aside to save or donate anyway. Once all credits cards and loans are payed off, we’ll be able to then begin placing necessary amounts away in proper savings and for donations.
Saving our money and helping others is important, but whenever we don’t spend smartly we’re still wasting our money.
Believe in yourself,
Warren La Duke