Many Americans are being tested now. Some are being tested for the first real time in their adult lives because of the financial crisis that continues to grip everyone’s attention. However, many Americans may not yet recognize that this test could turn out better for them than they ever imagined.
Question number one: What is really important to you in your life? We often think about how we are going to increase lifestyle. Perhaps that is the wrong question. Maybe our focus all along should have been “What’s important now?”
Question number two: Do you believe in yourself? This is more than a passing question. The worldwide financial meltdown makes this question more serious than ever, but the question is much more personal than about believing in yourself at work. This question is only in this “test” so that you really think about who you are and what you want.
Question number three: Do you believe only the rich get richer, or can you have a vision of yourself building savings and wealth?
Question number four: Can you commit to a strategy to build emergency savings, life-long savings and retirement investment? If you can, all you need is a plan.
Review your spending over the last three months. Look at your personal spending like a business would look at expenses. Make a commitment to reducing your spending by 10 – 15%. Call everyone you get a bill from and let them know that you have to reduce expenses by 15%. See what options present themselves. You might be surprised.
At the same time, make sure you take the time to look at your checking account for what it is: A MONEY LAUNDERING ACCOUNT for OTHER people’s money. Use every excuse you can to remove money – even small amounts – from that account and put it in money market savings.
While you focus more time on the most important thing in your life (question number one), make an effort to increase spending….on savings. If you have to start with a small amount, take only 1% from your next after-tax paycheck. Push it to savings. Then, each paycheck or at least once a month after, add 1% to it until you reach 15% savings every month.
Commit to this strategy (question number two) of using automatic savings to drive emergency savings. You should work to build 15 to 18 months of expenses in savings (money market savings account or certificates of deposit). Remember: savings will build faster than you think. Just focus on the automatic savings paycheck to paycheck and month to month. You are building to actually generate longer range goals. While that does not happen immediately, you should focus on the going the distance. How would your life be impacted by having 15 to 18 months of expenses in emergency savings? I thought so.
You must seek out examples of people who began with nothing and built wealth. If you look, you will find example after example. The best news: There are thousands of examples of wealth building that does not involve the lottery or a windfall. In other words, saving and investing for the long-term WORKS.
Work to learn all you can about saving and investing. Start with building your emergency savings fun, but don’t stop there. Keep going.
If you answer these four questions above and are ready for the journey, you are ready to shake things up and truly build wealth for yourself. Get started today.