According to a Gallup poll in 2013, two thirds of Americans do not prepare and follow a monthly financial budget. This means that over 200 million people are pretty much “winging it” and their future financial stability will be in jeopardy as a result.
The poll also indicated that even less people are planning their long-term financial plans. They’re not thinking about long-term savings and retirement. In fact, many of them are simply living paycheck-to-paycheck, hoping that maybe one day they can become wealthy, but not exercising discipline and effort to make that a reality.
Can you build wealth without a personal budget?
I suppose there are some people who could build wealth without a personal budget, but the reality is that most people cannot. To be wealthy means that your financially independent, or financially free. There are millionaires out there who may look like they’re wealthy in the public eye, but if they’re in debt up to their ears because they’ve been financially irresponsible, they’re not wealthy. They’re not much different than someone who makes $20,000 years, is also in debt up to their ears, and is also living paycheck-to-paycheck.
I know you want to build a financially stable future, and I assure you that it’s possible. However, the truth is that it’s going to take some work on your part. It’s going to take you changing those bad habits into good habits, and maybe even re-training your brain when it comes to what “being wealthy” really means.
Acquiring the real-deal wealth is possible, and today I want to share with you four important keys for budgeting your way to wealth.
1. Become disciplined
Many people sit down and make their income and expense list, but the problem is that they don’t stick to it. They get all excited about making the list, and maybe they keep up with it for a week or two. But sooner or later, their focus on sticking to their budget diminishes, and little by little money starts falling out of their pockets.
To become truly wealthy, it is important to create a realistic budget, and discipline yourself to stick with it. This means becoming friends with self-discipline. This means exercising healthy money habits.
When you go to the gym and exercise, your muscles get bigger and stronger, right? Well, when you can exercise healthy money habits consistently, according to your budget, your savings account and net worth will grow bigger and stronger too.
Now, if you haven’t sat down and actually created a budget, I want you to do that today. There are plenty of online resources that you can use in order to do so for free.
2. Write down your goals
This is where the rubber meets the road. You can create your budget and even do a pretty good job at sticking to it, but where are you headed? What are your short-term and long-term goals? Are you just sticking thousands of dollars into your savings account that’s yielding a .05% interest rate? At what age would you like to retire? How much would you like to have when you retire? Do you want to have passive income in the picture? (Yes, you do.)
This is where you get serious about your goals, and you write them down. You contemplate what you want and what it’s going to take for you to get it. You create a strategic action plan. You decide on how many houses you’d like to purchase as an investment per year. If you have debt, you create a plan that will eliminate that debt within a certain amount of time. You get down to business!
Go ahead and write your short and long-term goals down today.
3. Take advantage of technology
There are many free online websites and mobile apps that you can use to help you build wealth with a personal budget. Take advantage of them. Check out the following popular apps and commit to using them.
- Mint – Mint is a great tool to help you create a budget, as well as track your spending. You can also keep track of your debt, have the app pay your bills, and create long-term financial goals and track how you’re doing.
- LearnVest – Another great app that helps you set a budget and track your goals. There’s a free and paid version, and is a great site full of educational information to help you along your financial freedom journey.
- Personal Capital – You’ll not only get to create a budget here, but also track your investments and create strategies for retirement.
4. Educate yourself
Building wealth takes time, patience, a strategic plan, discipline, and wisdom. For many people, it’s easy to forget about their budget and just revert back to their old ways, mismanaging money. However, if you really want to create and sustain wealth, and set yourself up for early retirement with financial freedom, make a commitment to educate yourself regularly when it comes to money management.
This could be taking 15 or 30 minutes per day to read a blog or watch a video. It could be subscribing to various podcasts and keeping up with the financial times. This could mean taking a class or a workshop regularly. Or, hiring a business coach, mentor, or financial advisor. The key is to keep financial freedom and success in front of your eyes consistently. This way, you’ll not only be envisioning the wealthy future you desire, but also doing your part to manifest it at the same time.