Can you become Wealthy?

Can You Become Wealthy?

An important part of becoming wealthy is money management? Without good money management it doesn’t matter how much money you make, you won’t keep it. There are as many money management strategies as there are investment opportunities, so which one is best for you? The answer is…the one you can follow. You need to develop sound money management habits that you will stick too.

The first step in money management and thus wealth is debt elimination. You will never become wealthy if your credit cards are “maxed” out every month. You need to show some constraint in your expenses, which we’ll get into below. If your cards are already showing hefty balances, your first action is to get yourself a lower interest rate, either through negotiating with your current credit card company or by switching companies. You would be surprised what you can get, if you just ask. Secondly, you need to make an effort to pay a set amount over and above your minimum payment, even if it is just $5 to start with. But where do you find that extra money each month? This is where step two comes in.

The second step in money management is to have a budgetary strategy. Setting limits on how much you can spend on what types of items. This will be a personal choice for everyone, and will depend on your current financial health. Below are two examples, one for someone who is currently struggling with debt and one for someone who is on their way to becoming wealthy.

Example A

10% of income to reduce debt
10% of income to use on long-term savings for expensive items (car, trip etc.)
10% of income to be used on financial education (self improvement)
60% of income to be used on necessities (mortgage, food, utilities etc.)
10% of income to be used for play (dining out, movies, toys)

Example B

10% of income to be invested in passive income opportunities
10% of income to use on long-term savings for expensive items (car, trip etc.)
10% of income to be used on financial education (self improvement)
55% of income to be used on necessities (mortgage, food, utilities etc.)
10% of income to be used for play (dining out, movies, toys)
5% of income to be used for charity

Only your actions and commitment can manage your money to help you on the path to becoming wealthy.
If you choose to be rich then click here for more helpful information

About the Author

Cory operates an educational website to help people learn how they can become financially free.

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