August 20, 2015
S.P.E.N.D. Your Way to Financial Success
Make more money! That is the solution most people look for when looking to increase their financial freedom. Let’s face it; there is no easy way to simply make more money. You can’t just walk into your boss’s office and demand more money. Plus, it’s that kind of thinking that leads to getting scammed or falling for ‘get-rich-quick’ schemes. You help some guru ‘get rich’ with your money. Well, if you cannot earn your way to financial freedom by making more money, then you can at least S.P.E.N.D. your way there.
By following five simple steps you will be better prepared to handle your finances and begin your path to financial freedom. You will not build wealth overnight, but there are a few tried and true nuggets of wisdom that will help you get there faster no matter your income.
S – Save for emergencies
P – Plan your purchases
E – Establish financial goals
N – Never let others spend your money for you
D – Don’t forget about non-monthly expenses
Save for emergencies: We know that life’s little emergencies happen all the time. The question is not IF something you own will break, but WHEN. Rather than allowing emergencies to break the bank or borrowing every time something unexpected happens, put money aside to cover emergencies. Plan for the unexpected by establishing an emergency fund.
Plan your purchases: You gain control by creating a budget and choosing where you want to spend your money. A budget gives you the insight to control impulse purchases and plan for big expenses like a used car or an upcoming vacation. If you do not plan your purchases, your money will go towards things you cannot even remember instead of towards those things you really want.
Establish financial goals: The easiest way to stay on track with your money is to remember why it matters to you. Just like a diet is easier to stick to when you have a goal such as an upcoming class reunion or a trip to the beach, it is easier to stay with the program when you remember your financial goals. By establishing financial goals you can make sure you are handling your money the way you want to as you move closer and closer to those goals.
Never let others spend your money for you: Lots of people depend on you to buy things. Somebody does not earn a paycheck or bonus if you do not buy a lot of stuff. That’s why there are experts who do nothing but figure out ways to get you to buy their product or service. They’re professionals. Family and friends are a close second. It is easy for others to tell you how great that car or house is or how much you would enjoy that extravagant vacation. Maybe they are right, or maybe their next bonus depends on getting you to spend your money. Don’t let others influence how you spend YOUR money.
Don’t forget about non-monthly expenses: Nothing is more frustrating than working hard to keep your money under control, staying disciplined, sticking to a budget, and then having a large bill come due that you forgot about. You are looking at your bank account in November then all of a sudden, “I can’t believe it! Christmas is December 25th this year! I don’t have any money set aside. Someone should produce a calendar with these dates on it!” Birthdays and anniversaries don’t change either so there is no excuse – have the money set aside. Refer back to ‘P’ for Plan your purchases.
It’s not how much you make, but how much you S.P.E.N.D. that leads to financial freedom.
Written by: Len Rhodes