Statistically speaking, people breakdown when the word budget is mentioned. It is scary, difficult to track, and time consuming. A budget does not have to be strict but rather it can be used to create opportunity. This “monster” can be tailored to fit your lifestyle.
A budget is simply a tool; just as investing is a tool. These are just a few of the components that assist in wealth accumulation and financial independence. One of the biggest misconceptions about this industry is you have to be wealthy to invest. Notice, I said misconception! I once met a couple that over the course of their careers averaged $50,000 in combined income. The husband was a small business owner and his wife was a part-time assistant for a professor. At retirement they had accumulated over $2,000,000. Did they give up the tangible items along the way? Some, but not all. Did they enjoy life along the way? Absolutely! If you asked them today how they did it, they would tell you it took a little time on the front end.
It starts with paying yourself first! At a minimum, participate in your companies retirement plan to receive their match. If you haven’t already read Rianka’s “We All Love Free Money” post, I encourage you to do so. Start by saving 10 percent of your income. If you have sufficient funds to cover an emergency and you are working towards your financial and retirement goals, you can quite literally spend the rest.
This is not a process of hoarding cash and waiting until retirement to use it. To be successful we enjoy life now but still address our future financial needs.
Unfortunately society encourages us to compete with the Jones’. I am here to tell you…Mr. and Mrs. Jones just filed for bankruptcy! I encourage you to take control of your cash. I assure you, once you have, it becomes easier and easier. Again, that is the first step to financial prosperity. Rianka has provided some excellent free resources; I challenge you all to use them!
Andrew J. Miller CFP®