responsible

 

Being fiscally responsible means living within your means. Instant gratification and over-extending yourself, thinking that you will pay for it later is not the way to go. Justifying spending beyond your means is not going to reduce your desire or eagerness for the next new toy. In fact, you will be digging a bigger hole that you will find difficult to get out of, so get a hold of yourself.

 

No doubt, you have heard of Mark Cuban, entrepreneur regular on ABC’s “Shark Tank” and owner of the Dallas Mavericks, Landmark Theatres, co-owner of 2929 Entertainment, and Chairman of AXS TV. It was not an easy journey. Mark started out selling garbage bags door-to-door and lived off ketchup and mustard sandwiches while attending college.

 

Holding many jobs while attending University of Pittsburgh, Indiana University, and Kelley School of Business, Mark made his first million as an entrepreneur when he started a computer consulting firm. He made his first billion when he started web- broadcasting sports and is now worth of $2.6 billion. Mark was financially responsible and lived within his means, spending less than he made.

 

He didn’t use credit cards and did NOT spend every dime that he made. He followed the rule of “paying yourself first” – at least 10% before he paid the bills. Mark was prepared for the unexpected and knew where his money was going.

 

pay yourself

 

Being fiscally responsible means living within your means, regardless of what that level is. Take a close look at what your financial situation is at this moment.

 

Evaluate your spending habits and what you earn per month. Make any necessary adjustments so that you are put on the right path to being financially responsible, as you become a millionaire. And pay yourself first.

 

What does that really mean? Before you pay your bills, buy groceries, or do anything else, set aside a portion of your income to save. You can put your money in a 401 K or your savings account. The first bill you should pay each month should be yourself. Get into this habit and you will build tremendous wealth.

 

Paying yourself first in the real world may seem impossible when you have a car payment, rent, groceries, and utilities. Many people save what’s left over after paying the bills but if you don’t develop the saving habit right now, there are always going to be an excuse. Make saving a priority in your life. When you pay yourself first, you mentally establish saving as a priority in your life. You are telling yourself that YOU are more important the landlord or the utility company. You will feel quite empowered when you save and develop good financial habits.

 

Most people spend money in the following order: bills, fun, then, savings. That usually leaves very little to put in your savings account. Change that order to savings, bills and then fun. It will make it easier for you to set money aside before you come up with reasons to spend it.

 

Paying yourself first help you build a cash buffer with real-world applications. By regularly contributing to your savings account, you are building a nest egg and can use that money to open your own business, start a new company or invest in an opportunity. It doesn’t matter how old you are right at this very moment – start saving now. Make the process as painless as possible by arranging for the money to be taken from your paycheck before you see it. You will never know it is missing. If your employer offers a 401(k), enroll as soon as possible, especially if they match your contributions which are like ‘free money.’

 

Bob Weidner likes to make a game out of saving money by shopping at the best outlet stores and refuses to pay full price for anything. He feels it is totally worth the effort. You wouldn’t know it by looking at him, but Bob is worth millions of dollars. He owns three homes and splurges once a year on a trip to Italy. A self-made millionaire, Bob is quite mindful of how he spends, saves and invests his money.

 

Do You Understand Compound Interest? And Returns?

 

Tony Robbins talked about the importance of understanding compound interest on the Dr. Oz Show recently. Tony recommended starting a Roth IRA account because this will allow your investments to grow tax-free due to the amazing power of compound interest (and compound returns). Regular investments in a Roth IRA can lead to enormous wealth in your future.

 

You can also open a high-interest savings account at your bank and set up automatic transfers into this account, from your regular checking account or directly from your paycheck. Look at this as your most important bill of the month. This is not an impossible task. Everyone can save at least 1% of his or her income. For example, as your income increases set aside the gains you make for savings, retirement or investment. You will force yourself to develop the saving habit and be fiscally responsible.

 

Quick TIP: Pay yourself first.

 

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