“Broke has nothing to do with how much you make. It has to do with how much you keep.” – Malcolm “MJ” Harris
Do you have a relatively good income but still end up with little to no money at the end of the month? Well, In order to build wealth, it is vital that you learn to minimise your expenses. Many of us are not experts at managing our own finances. Malcolm “MJ” Harris is the CEO of a National Care Financial Group and stresses the importance of financial security. In this video he highlights that the wealthiest people tend to be the ones that spend the least.
There is still time to change the status quo. Here are five ways you can make smarter money choices and increase your long-term financial security:
Pay Yourself First
A lot of people don’t make savings a priority. If you want to maximise your wealth, you will need to get into the habit of paying yourself first. This means that you put a portion of each paycheck into a savings account before you divvy up the rest to cover expenses. If you are able to do this month after month, you will get ahead financially and your future self with thank you for it.
Distinguish Wants From Needs
“People, generally speaking, have a hard time differentiating wants and needs,” explains Grayson Bell, a personal financial blogger at Debt Roundup. If you want to stop going broke, it is important that you learn to distinguish wants from needs. For example, you might need new shoes, but you want a designer brand. This mentality is what leads to a depletion of finances. If you want to create more wealth, you have to develop self-control and really hone in on what you need versus what you want. A luxury pair of shoes may look good, but it won’t help you retain wealth.
Stick To A Budget
Many people don’t have a budget, let alone stick to one. However, having a budget is a vital for your personal finances. You may not think that you need a budget, but you do. It doesn’t matter how rich or poor you are, having a budget can help you figure out how you spend your money and ways you can improve your financial situation.
“If you don’t know where your money is currently going, you can’t turn it in the direction you’d prefer it would do the most good.” – Donna Freedman, personal finance expert.
Build An Emergency Fund
Having an emergency fund can really help you manage your money. If you are able to save money for a rainy day, you will put yourself in a better position to deal with financial setbacks.
Stop Trying To Impress People
The financial decisions you make should be aligned with your future financial needs. Trying to impress other people can really impact your finances. When we buy the latest luxury car model, splash out on deluxe branded items and the like, we are often looking for validation from others. We want them to know that we have the money to dress a certain way, so we buy things that convey wealth. This is a surefire way to go broke. You should pay more attention to your own future. Stop spending money on things and invest that money into assets that your future self will thank you for.
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I am Luke Miller, content manager at Truth Theory and creator of Potential For Change. I like to blend psychology and spirituality to help you create more happiness in your life.Grab a copy of my free 33 Page Illustrated eBook- Psychology Meets Spirituality- Secrets To A Supercharged Life You Control Here