Wealth is not about making money, it’s about saving money. Good habits are what separate a wealthy individual from a bankrupt one (and independence from dependence) . In the consumer-based society we live in it’s easy to judge one’s wealth based upon the toys they have in their garage, the size of their house or the exclusivity of their country club membership.
The reality is that those “rich people” who are leveraged out the wazoo are no more wealthy (nor happy) than those living paycheck to paycheck. Here are some realistic first steps to increasing your wealth in 2013:
- Make your nuts smaller. Pardon me? Thanks right, you need to decrease your fixed costs for 2013. Write down exactly how much you’re spending per month on fix payments such as mortgage, car, utilities, school debt, etc. Chances are at least one of those items will be paid off this year. Instead of getting a new car as soon as your old one is paid off, keep driving payment free for a year or two. Instead of getting a bigger house when you payoff your school loan, direct those payments to savings. Look back on 2013 as the year that your payments decreased and your savings increased.
- Let your material possessions go… If you’re like most Americans you have way too much crap in your house. By crap I mean material possessions which you’re not using, which are taking up space, and which you probably purchased as an impulse rather than a real need. Start the new year differently this year by making a list of what you can get rid of – not what you want to accumulate. Shrinking your basis of material possessions will free up both your mind and your wallet. Living a substance based life is one of the 18 Financial Tips I Wish Someone Told Me When I Was 18.
- Reverse your buying cycle. Most of us run up our credit card to then pay it off when we get the money. Start the new year by reversing this cycle. Try delaying your spending by one pay cycle so that instead of putting your purchases on credit, you put them on your debit card. By spending the money you already have, you’ll force yourself to think twice about impulse buys.