Date: September 4, 2020
A recent study performed by the Charles Schwab Foundation found that 89% of respondents said that they think a lack of financial education was a major contributing factor leading to the major social issues we’re currently facing like poverty, lack of job opportunities, and wealth inequality (Schwab-Pomerantz, 2020).
Financial Literacy is really just a fancy way of saying ‘healthy money management skills’. The financially literate build wealth by managing debt, living beneath their means, spend on a budget, invest to earn a return, and prepare for the unexpected. It’s the difference between living paycheck to paycheck and upward mobility and leaving a legacy.
So, I’m here to give you some simple ways to start improving your financial health. Whether you’re educated in financial management or not, you should still be able to grow your nest egg without breaking the bank.
Start small – incremental progress builds into bigger wins over time. Baseball games aren’t won by home runs, it is the accumulation of base hits that add up; the same is true with financial management. Start right now by saving at least 10% of your income, every deposit – immediately move 10% into a savings account. Most importantly – NEVER touch it, it has a job to do and that job is to help you grow your wealth, it can’t do its job if you’re taking it away to work on other things.
Know your numbers. Whether your making 1,000 a month or 100,000 a month – you’ve got to know your income and expenses. Write it down, put it into a spreadsheet, use QuickBooks – whatever you’ve got to do to clearly see and understand how much is coming in and how much is going out each month. Until you know your numbers, you can’t do anything to improve them.
Put together a budget. Once you’ve listed out all your recurring income and expenditures, start to plan out the future (don’t forget to budget for your 10% savings plan!). After you have everything listed out, look at your budget to see where you can make cuts in expenditures or increases in income. The goal is to plan every month to have a cash surplus, and not to spend the surplus.
As your account balances start to increase you will be empowered and motivated to continue seeing it climb. Small sacrifices pay off – incremental wins add up. Becoming wealthy is not as hard as society may lead you to believe.
We’ve helped hundreds of business owners grow to more than 7 figures and double (sometimes even triple) their monthly income using these same ‘tricks’. We’d be honored to help you too.