One way to create wealth is to ensure that you reduce your expenses. There is no ‘if’ and ‘but’ about this, you have to keep your expenses low.
This is a very important concept that can’t be glossed over, so as you do your weekly budgets and personal finance planning, you need to find ways to reduce your expenses. This should be at the forefront of your thoughts not some of the time, but always especially if you have debt.
Some people are of the opinion that you’ve got only one life to live; therefore, you should enjoy all you have in the here and now. Have you noticed that people are living longer and longer and if you don’t plan for the future today then the future will plan for itself and you will most definitely not like the end result.
Most of the smartest rich people don’t have expenses greater than their income. Don’t be fooled by the façade of reality T.V. that portrays ownership of material goods as wealth. It’s not wealth and too often you hear of millionaires today and broke tomorrow. Lottery winner today and worse off in less than a year ~ have you ever asked yourself why this happens?
Broke has nothing to do with how much one makes, it has to do with how much you keep. If you make $100,000 plus and spend it all or spend more than you make because you use credit to supplement your lifestyle then you are broke.
People who are wealthy keep their expenses low. Your expenses have got to be kept really low.
The best way to track how you’re keeping your expenses low is from your spending budget. This is you managing your cash flow and knowing what is coming in and what is going out and knowing what to tweak. Those little gains here and there go a long way to ensuring you’re building your wealth.
With this new found savings (the difference between what you earn and what you spend), you could be $25 or $1000 a month richer and you can invest in Real Estate, new side hustle, pay off all debts, travel, increase your retirement savings etc., the greater the savings found, the better as this is how you create wealth.
Wealth is using your debit card to purchase that ticket for that irresistible trip to Paris that your friend just asked you to take with her. This is one of the many ways debt free living feels like.
There is no point retiring middle class and then finding yourself below lower class in your retirement years. There are too many people living a fabulous life in their working years and then all broke in retirement.
In my book ‘Fabulous and Broke’ I talk about 7 life hacks to bring order to your finances. Check it out and make the choice today to living a fabulous life all through your life span and not just the here and now, but create a great financial foundation.
Reduce your expenses and stop trying to be like the Joneses that have less financial security than you do.
How are you creating wealth? Would love to read your comments below.
Till next time!