Editor’s Note: This is a guest post from Vincent @ Hit Your Goals. Enjoy!
The first step to become wealthy is to manage our expenses. Have you noticed that whenever we do not manage our expenses, they tend to rise to our level of income. For example, when we are earning 2000 bucks per month, we have ways to spend it all without saving any of it and even when our income is increased to 20,000 bucks per month, we still have ways to spend it all because we will find the excuses to have a more luxurious lifestyle.
There are people who are broke with a monthly income of 2000 bucks and there are also people who are broke with a monthly income of 20,000 bucks per month. What does that mean? It means that whenever we are not managing our expenses, they tend to grow to our level of income and this is an attribute that you do not want to have if you want to be rich.
This is the one of the most important traits you need to have if you want to become rich. Whenever we talk about millionaires, we have the mental images of them living in a mansion, driving a fancy car or owning an island.
This is not the truth about millionaires. Research had shown that most millionaire don’t actually live in fairy tales lifestyle that we thought they do. Instead they are frugal. Two of the world’s richest men are known for this attribute.
Ingvar Kamprad and Warren Buffett, the owner of IKEA and one of the best investor in the world respectively, are known for their frugal habits. Ingvar Kamprad still drives an old Volvo and Warren Buffett loves his Cherry Coke instead of the expensive champagne.
7 Tips To Grow Your Bank Account
1. Save 10% of your income – Always make it a habit to save 10% of your income and do not touch it no matter what. Imagine putting 2 eggs into a basket every morning and removing 1 egg at the evening, what will happen to the basket over time? It will eventually overflow! It works the same way for your bank account.
2. Track you expenses – Set up a spread sheet or write down on a note book about what are you spending on and you can review your expenses at the end of the month and note down what are some of the expenses that you can cut down on.
3. Budget – Have a budget for your month. Set how much you will spend on necessities, entertainment, food, and transport. Then stick to it. Having a budget will help you to curb overspending.
4. Eliminate debt – If you have outstanding debt, make sure that you work to eliminate it. The interest that you are paying for your debt makes others rich, not you. You can put the money you are paying for interest into better use instead of letting it slip out of your hand.
5. Lifestyle – Do you have a lifestyle that takes more money out of your pocket then you are putting in? If you are, it is time to have a change of lifestyle. Be more prudent. Borrow library books instead of buying them. Eat out less. These are some ways to help you save your hard earned money.
6. Stop your impulse buy – The salesman are very tactful and I believe that they can even sell ice to Eskimos. So beware of being urged on to buy whatever they are promoting. Have a shopping list and stick to it, so that you will have a lesser tendency to buy on impulse.
7. Invest – We only have 24 hours a day and there is a limit of how much time we can work. By investing, you can make your money work for you without much effort on your side. Learn more about investing and start allocating your money into areas such as equities, fixed deposits, or any investment you are well educated on.
Vincent is the author of Hit Your Goals at HealthMoneySuccess.com. He writes about personal development, finance and health at his blog and be sure to subscribe to his blog over here so that you won’t miss out on his latest articles