Have you ever felt like your money seems to be slipping out of your hands- or your wallet even when it’s still with you? The joy of a salary is always quickly washed away by the murky scent of rent, electricity, fuel and all the other living expenses leaving you penniless till the next month end. Or maybe you never seem to know where the money you make goes every month (try writing a money diary!). I have been there, slept there and got the souvenir. So, as someone who has been listening to what the money ‘sensei’ has taught, I will share those priceless secrets with you. Note: it may be what you’ve heard before, but since you’ve never got around to applying it before now, give me some credit for reminding you…
- Never spend more than what you earn: This is the simple income vs. expenses rule. If you make 100 dollars (or your country’s equivalent of that amount) and your groceries, transport, rent, and other expenses are 70 dollars, then you’re on the right track. If your expenses in total cost 100 dollars or more, then you will always be broke and will never make real wealth. Make all the cutbacks necessary, do away with all the necessary luxuries until you can afford it and still have enough for a rainy day. Fast food visits, cinemas and ‘trips with friends’ are a luxury you cannot afford without proper planning. Those ‘necessary’ visits to your friend’s place or your aunt’s place every weekend maybe hurting you more than you know, try saving the money you would have spent on fuel/transport and ‘sweets’ for nieces, nephews, cousins – or your girlfriend’s spoilt younger brother for a reasonable gift at Christmas or Valentine’s Day.
- Don’t cut your coat according to your size: I know, this goes against everything we were taught growing up but if you must be able to manage your funds, you must cut your coat according to your ‘clothe’, not your size. It is not about what you want or feel you need; it’s about living with the resources you have available. Never go out of your way to satisfy what you feel is a need, except in extreme cases or emergencies, if you can’t afford it, the truth is you don’t need it at the moment.
- Know the difference between needs and wants: Needs are necessities of life, wants are things we ‘want’ that make us feel better about ourselves. Remember the asset/liability clause? Spend your money on things that can get you more money (assets), like using savings to start a little business by the side or get training; not things that take money out of your pockets (liabilities) like a car –unless you can afford it, blackberry, excessive airtime, shoes, a bigger house…
- Have an ‘impact’ mentality: My husband calls it the “project” mentality. Live your life as though every penny that comes to your hand has a specific assignment to execute, not as a reward for your hard work. Believe that the money in your hand is capital for a project that you will use to make your life- and humanity a better place. Invest your money in helping people around you and helping yourself have a better tomorrow. Decide to put your money into something you can proudly account for (new clothes or drinks for your friends is not one of them).
- Spend with the future in mind: “Save for a rainy day”, may sound cliché, but that’s because it holds true. If rain doesn’t fall in your part of the world, let me say it this way; “gather” savings consistently over time for the day of ‘drought’!
- Consistency is key: Most people start off on a financial good foot, only to return to their ‘vomit’ when discouraged. Little drops of water do make a mighty ocean when it comes to money, you just need to hang in there and keep gathering savings and investing your profits (extras) as they come and not quitting when things go wrong.
- See yourself as a money tree: I know, you may not be anything close to it yet but before you go on about how broke you are and how money doesn’t grow on trees, hear me out. Trees need nurturing to grow. No matter how small –or tall they are, they keep growing. Always do everything you can to improve yourself, learn everything you can about money and keep increasing in skills that improve your income. No matter how rich you are, keep trying to be a better –and richer you.
- Be your own cheerleader: Every millionaire who didn’t steal his money or win it in a lottery pushed through by self-encouragement. Just like David encouraged himself in the Lord, you must learn to encourage yourself. When chips are down, people don’t always come rushing to pick you up, so you must learn to dust your own behind and keep marching towards wealth no matter what life throws your way.
These points are my humble- however tested and tried suggestions, it’s what “I” would do if I had a million dollars. Please write and let me know about your own personal path to wealth, or what you are doing to get there. I’m dying to know, what would you do if you had a million dollars?