Getting back to basics.
When you purchased your first home or moved out from your parents, I am sure you did some form of budgeting to ensure you can afford it.
When last, if ever, did you look back at that budget or redo the budget?
Through multiple studies it was found that running your home on a budget is the first step in creating wealth and financial security.
For example, a considerable number of teachers are remarkably wealthier than medical doctors, even though the doctors’ income are higher. The simple distinction between the teacher and doctor was that the majority of teachers budget!
Generating income is important in your career and or business but if you don’t know where the money is going, you will never achieve financial wealth and freedom.
Creating a budget is easy. There are many online tools and guidance available and this combined with pure logic will aid you in creating the required budget. However, if you do not compare your actual spend to the budget, you have wasted your time and achieved nothing.
Speaking to many wealthy and successful individuals I have found that they use a very simple budgeting method:
First, they calculate the must pays, bonds, cars and insurances and make sure these are covered.
Second, they have a separate account for household spending and transfer a fixed amount to this account, or draw the money in cash.
Third, the surplus funds are immediately transferred to their preferred investment account.
This is the easiest form of budgeting and is called self created scarcity.