10) The most obvious and easy to address is Over Spending! The average American spends $1.30 dollars for every dollar earned. If you want to have more money next year than you did this year, focus on keeping and investing your money as a starting place. That would be a great kick start.
9) Misusing emergency funds. The emergency fund is an essential component to keeping your money in your wallet. Emergency funds are where we should keep at least 3-6 of money to cover the cost of bills for when emergencies arise. Do not wait for an emergency to arise to plan an emergency fund…and FYI new shoes or a new t.v. is NOT an emergency!
Emergencies are annoying and unfortunate but most of all they're COSTLY, so be prepared. If you don’t have an emergency fund, get one. Credit cards are horrible emergency funds because the interest rate will kill your finances and ensure that you don’t have money long term. Hopefully you don’t get into a car accident this year. But if you do, you will be happy that you had an emergency fund that could cover the deductible.
8) Debt: …is a four letter word, most of us cringe when we hear it. But don’t worry, you CAN beat debt and finish rich, but you have to start now. Twenty five percent of all Americans ages18-65 have more debt than savings. There is such a thing as “good” debt, like buying a home.
Sixty four percent of the American population are home owners. Good! And then there is bad debt like credit card debt. The average American consumer has 3-4 credit cards. Average credit card debt per household: $15,799. Bad!(consolidatedcredit.org).
7) Budget won't budge: End budgeting! Budgeting is like dieting, we know we need to discipline our spending just like our diets, so naturally we overspend on restaurant food we probably shouldn’t eat. Don’t worry, just remember the best diet is the one that tastes good but helps you stay fit and healthy…and allows for a day off every once in a while. If budgeting doesn’t seem to work, it may be because we aren’t doing it right. First of all the reason we budget is to build our wealth, right? So the point of budgeting isn’t actually about cutting down your
awesome life, it’s about adding to it! Wealthy people know how to budget effectively. They focus on having more in the long term, not living less. Instead of vowing to eat bread and water so they can save a few pennies, they focus on making more money from an alternate source of income and investing it well. Promising to eat only bread and water probably wont work for long because it’s too extreme, unrealistic and unreasonable. Get your spending under control, make sure you track what you spend, and learn to make an alternative income. And then, well…save it. #winning
6) Saving in the wrong place: Huh? It's no joke, saving money is a great thing, but checking accounts and saving accounts aren’t the best place to save. Checkings and saving accounts are terrible places to save because your money is too accessible and it gains no interest. Interest rates on a saving account is only half of a percent…
your money isn’t really growing much. Checking and savings accounts although necessary, enable you to over spend. Last year banks made over 30 billion dollars in over draft fees. Did you know that when we use our debit cards we are more likely to over spend? use cash. Using old fashion, physical cash makes the consumer more cognoscente of their spending. If you want more money, focus on saving your money in places like mutual funds, IRAs, ETFs, and Variable annuities, where you could get 20 times more interest than a savings account. Wealthy people see each dollar as a seed that if planted in the right place can become 100 dollars more, and why stop there.....
5) No Goals: Most People understand that goals are specific. Instead of saying "I want more money," attaching a fixed number like saving 1000
dollars more this year is a much more effective strategy. A number Is good because you can track your progress. And if you save it in places that aren’t easily accessible like an IRA, you’ll be less likely to use it for something else. Wealth is created, and unless you are accountable for your dollars, they will tend to slip away. Paying yourself first before you give it to a vendor makes your chances of acquirin
g the dollar value you want to save very likely. Have an objective. If you start a small business you could save yourself $1000's in tax deductions alone with a 1099, which allows you to spend first, and pay tax on what’s left over… So, if your goal is $1000 more, you can attain this simply by starting a profitable side business. Don’t do this alone. Working with a financial planner who can guide you by helping you track, build, and grow your net worth is a good way to get educated and financially savvy.
4) No plan: You don’t have to pay thousands of dollars for a plan, but if you fail to plan…you plan to fail. Its cliché but absolutely true. Placing too
much emphasis on making money can dampen your grasp on what’s truly valuable, but it is important and therefore worth planning.
The first thing we should do for our money is to invest in a good plan. A good plan will take into account what you can afford, and should consider your goals; like vacations, big purchases, emergency reserves, a strategy for existing debt AND of course retirement. Most importantly, have your plan include protection against unforeseen calamity, and long-term savings with variety of wealth building vehicles!
3) Get financially educated: Aim to read at least one book on building wealth a year. There are a lot of inexpensive financial seminars you can attend for the price of a movie ticket, where you’ll meet advisors and investors. Bring your spouse and make an adventure out of it. But the main thing is to learn the options that you have at your disposal that many people are already using.
2) Get a Planner: Don’t reinvent the wheel. Anyone who says money isn’t important probably doesn’t have any.
In a survey conducted by the Department of Human Health Services, a harrowing 95 percent of people never retire well off. Only 4 percent of Americans are able to sustain their lifestyle after they stop working, and just 1 percent retire wealthy. The few that do retire wealthy attributed it to 3 reasons: Having a good financial coach, learning to manage their money, and having a good plan. Money is important and you won’t have a lot of it if you can’t handle what you already have. We should get help from qualified financial advisors, because it doesn’t have to cost you an arm and a leg.
1) Invest: Take advantage of compound interest. It would take your money 144 years to double in a savings account. It only takes 7.2 years for your money to double in a mutual fund. Wealthy people don’t lose sleep worrying about money, because they keep their money in places that they know will improve their overall financial condition. The first thing that we should consider when planning our wealth is where to save. Where you keep your money "es Muy importante!" ROI, your Return On Investment should be your focus. Having a plan will help you have more money at the end of the year beacause it will meet the challenges that keep you from your goal. Don’t stress! Plans help you relax about your finances so that you can get back to enjoying life! So many of us miss this step. So don’t forget to plan, get educated and benefit from the advice of a planner.
By: Jermaine Fagan