Always Want To Have Money? Don’t Spend More Than You Make.
If you always want to have money, don’t spend more than you make, …is often easier said than done. Life is expensive, fickle and full of sometimes unpleasant surprises. Children sometimes become sick and need to see doctors or worse, they need to be hospitalised. If you’re not covered by insurance, there you go, your wallet takes a severe beating.
Aside then from life’s vagaries and unpleasantness, some little rules could add up to go a long way to helping you achieve total financial independance. In this article I sum up just three to remind you how easy it actually is.
1) Don’t subscribe to credit cards.
Each and every single purchase you make with your credit card is mined with a credit cost unless you pay off your credit card debt completely every single month without fail. By the end of the year, if you add up all the small interest payments you have made to your credit card company, you will find you have given away a nice plasma screen TV or even more.
Let us assume that this ads up to some 699$. Now multiply that by 25 years and imagine you put that amount away in a savings account at a mere 2% yearly yield without making any withdrawals. By the end of year 25 you would have 23 800.80$ in the account.
2) If you do subscribe to a credit card, pay off the balance every month!
Nowadays, it is almost impossible to make online purchases without having a credit card. Not falling into the trap of letting some credit run up is very hard to do, but some determination and counting your losses might sufficiently motivate you to forego the temptation of buying that item anyway.
Now, if you run up some credit on two cards as most of us do, paying of the balance every month could make a difference of a whopping 47 000 dollars in your favor at the end of those 25 years.
3) Save a mere 100 dollars every month and put it in a low yield savings account.
Now that you are convinced that running up credit card costs is extremely detrimental to your financial health, discipline yourself to put the money you save this way in a low yield secure savings account. (Try your local post office, you’ll be surprised at the conditions they offer!)
With the credit cost of two credit cards saved, you can afford to put 100$ away every month. Keep this up as long as you work, for most of us, this will be 40 years. By the end of this period, you will have 76 112.43 dollars in the account.
Now, is there still any doubt in your mind that you can become rich?
