You can break personal finance into three broad categories: income, expenses and savings. Your personal cash flow statement lists your income and expenses and a common goal is to end the month with money left over to put into savings.
We often tend to focus on our income and stretch what we make to pay our bills. We eat out a lot, we put purchases on credit cards and we try not to think about how much we are spending or where it’s going . . . We allot money for our interest sucking credit cards and pay through the nose for things we thought we couldn’t live without from the past. We work to make the best with what we have, but as we live in a “buy now pay later” society we ignorantly avoid the third category, SAVINGS.
Financial ignorance doesn’t mean we are stupid, it just means that we haven’t developed skills or the “know how” to actually put money in savings. We have family patterns and a society that does not know what it would feel like to have a large amount of money in the bank. Savings creates security, it creates a buffer from any of life’s experiences that could completely wipe you out financially. Savings are where the heavy lifting comes in to help be financially fit.
Building wealth has to do with savings. We often spend everything we have and we live from pay check to paycheck. Putting money in a savings account shows self-discipline. It helps you to live well within your means. Those in poverty mindedness oftentimes spend everything they have and more. When you save money, it makes you feel wealthy, in control financially and gives you the power to say “no” to any extra spending.
Saving money builds a buffer between you and financial hemorrhaging. It can help you set better financial boundaries. Putting more cash into your savings account instead of making unnecessary purchases helps increase your personal power.
After you have a substantial emergency fund the next step is to “work” like you have never worked before to get out of debt and stay out of debt. Run from debt. Make double payments on credit cards and get yourself out of the financial traps of interest and late payments that enslave us and keep us in bondage. You do have the power to free yourself. Stay away from loans; make plans to avoid borrowing. Know where your financial weaknesses are and make sure you don’t fall prey to those weaknesses. Debt is not a tool; it is a method to make banks wealthy. Getting out of debt is part two of building wealth.
Take responsibility for your finances and help teach correct principles to the next generation.
You can do it! Happy saving!
Be sure to join us for a “FREE” Live Class with Pam Robinson – 8 Steps to Building Wealth.
MONDAY September 11, 2017 @ 11:00 am.