The #1 Money Secret of The Rich

The #1 Money Secret of The Rich

Ever wonder how the rich get richer?  It’s simple.  They spend less than they earn, and invest the difference.  If you’re not born into money, here are five tips for spending less so you can invest more and build wealth this year.

1. Track Your Spending.  It’s hard to tell where you’re spending too much if you don’t write anything down.  But who wants to save receipts, log a checkbook register, or use a spreadsheet?  New online tools help you automatically track all your financial information in one place, for free.  At www.mint.com you can set up a free account to see exactly where your money is going.

2. Use a Budget. This financial practice of the rich has enormous power.  You may prefer to call it a “spending plan” but the idea here is to know how much you can spend on different categories so you don’t overextend yourself.  Include savings as a category and “pay yourself first” each month by putting money aside into a designated savings account.

3. Rein in Expensive Habits.  Smoking and eating out are expensive.  Statistics show that the pack-a-day smoker spends nearly $260,000 over a lifetime – and that does not include increased insurance costs and other factors.  Or, you may enjoy eating at nice restaurants each week, which is another budget killer.  What habits can you reduce to save money?

4. Pay Down Debt.  As you free up more of your income it can be smart to pay down high-interest debt.  For example, taking extra money to pay down a loan with 10% interest can be better than putting money in a savings account at 3% interest.

5. Pay In Cash.  Credit card companies know you spend more when there’s not an immediate withdrawal from your bank account.  Try to pay for everything in cash (or debit card).  If you want a new computer, to take a vacation, or even a car, try to save up and pay for it in cash instead of getting a loan.  Remember, the key here is it to not take on more debt.

The secret to building wealth is to reduce your spending and debt so more of your income can work for you.  Follow these tips to free up more money for savings and investments.  And may you have a prosperous New Year! 

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This above information is an excerpt from my monthyl SERVICE FOR LIFE! mailer. Its such great info, so I wanted to share with you online too.