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This is a guest post from Joe Johnson
Wealth is measured by expenses and income. We are all wealthy; you just don’t know it yet!
Wealth is not measured by how much money you have in your bank account or by how many tangible items you own. Wealth is the difference between your expenditures and your income. The higher this ratio, the wealthier you are. The process of reaching the goal of wealth is simple. You need to decrease your expenditures and save as much of your income as possible. Taking a close look at your expenditures and making different choice can elevate your wealth and allow you to be financially independent. Here are 10 advices to identifying wasteful spending and increasing your wealth.
1) Review bank fees. Large financial institutions charge fees for checking account balances, the number of checks you write in a month, and for using other bank’s ATM machines. Save on fees by switching to a local credit union where fees are minimal, if any, and order new personal checks online where it can be found at a cheaper rate.
2) Review monthly expenses. Keep all your receipts and billing statements for a full month. At month’s end review where your money was spent and identify areas that are not necessary, or that was provoked by impulsive spending. At times it is easy to just make a purchase by sliding that credit card through the machine, without realizing how it is adding up. Reviewing your expenses will give you a clear picture of your expenditures.
3) Make lifestyle changes. Cook enough dinner to allow for leftovers for the next night, prepare home lunch for yourself, spouse, and/or children, and brew your own coffee at home. Purchasing groceries on sale and with coupons can allow for more food to be purchased for making your own meals, instead of spending high costs on take-out food and fancy coffee.
4) Get a calendar and list all payment due dates. Having the due dates for bills available on a calendar, and giving yourself 5 days in advance to make the payments, can ensure that you are not being charged costly late fees. Receiving a late fee is like you never even made a payment, as it will increase the balance on the bill for the next month.
5) Be positive. Don’t be afraid of bills or money. Look at is as a process in life – that’s it. Be grateful for what you have and take small steps each month to gain financial freedom. Understand that it will not happen overnight, but it is okay.
6) Stop and think. Is the purchase you are about to make something that is needed or something that is wanted? Many people get into financial trouble through impulsive buying, which is usually accompanied by the use of a credit card. Think – do I have the cash on hand? Can I afford to make this purchase now or can I wait and save some money?
7) Search for free entertainment. It doesn’t cost a dime to have fun. Take a walk in the park and enjoy the beauty that surrounds you. Plan a picnic at a nearby park or beach. It’s amazing how sandwiches, chips, and fruit taste so much better when packed as a picnic meal. Enjoying the outdoors has no cost, except relaxation and fellowship.
8) Set and stick to a debt pay off goal. Stop charging purchases. Use your budget to keep track of the debt owed and the progress made each month to decreasing that debt. Seeing the debt decrease will make you feel good and more likely to stick to your goal.
9) Clip coupons and bargain hunt. Check your local Sunday paper for coupons, as well as coupon websites for additional savings on items you routinely purchase. There are many discount and thrift stores in communities, or online bargain shopping sites like EBay where items can be purchases at reasonable costs.
10) Decrease impulsive buying and create lists. Create a shopping list before entering a store. Have a plan and stick to it. Research has shown that those who use shopping lists are less likely to engage in impulsive buying.
You will feel great with having control over your finances and increases your wealth each month. Stay away from using credit cards, and stick to using debit cards and personalized checks cheap to eliminate the chance of reverting back to large amounts of debt.
The third article in this series will deal with building you a stable financial future.
Author Bio: Residing in Minnesota, Joe Johnson has been active in online communities for over 15 years. He enjoys helping families and individuals understand the importance of personal finances, such as saving and budgeting money, by contributing articles to related online web sites.
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