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Why Budget?- The First Step to Wealth Management and Financial Freedom

Written by: Mimi Ward

Article Overview: You have probably heard that approximately 70% of all lottery winners go bankrupt within a few years. Do you ever wonder why this happens? The answer is very simple, actually. They never learned to discipline themselves when they didn't have a lot of money. Budgeting is a skill that is not taught in school, but it is the one critical skill that determines whether you will become financially successful or live from paycheck to paycheck in a downward spiral.

Why Budget?- The First Step to Wealth Management and Financial Freedom

You have probably heard that approximately 70% of all lottery winners go bankrupt within a few years. Do you ever wonder why this happens?

The answer is very simple, actually. They never learned to discipline themselves when they didn't have a lot of money.

Budgeting is a skill that is not taught in school, but it is the one critical skill that determines whether you will become financially successful or live from paycheck to paycheck in a downward spiral.

Budgeting techniques are actually very simple. If you develop your system and follow it daily, you will find that it doesn't take a lot of time.

It feels great to have good financial health! You know how great it feels to take care of your body and be in great physical health, don't you? Well, great financial health feels just as good-or better! But, just like you must monitor what you eat and how you exercise for good physical health, you must monitor how much money you bring in and what you spend for good financial health.

Great financial health has many benefits. It is preventative health, so it means that you can save yourself from some very depressing times through foresight and planning. It will mean greater financial freedom to you, since you will always know where you stand in relation to assets and debts. It will allow you to enjoy TODAY more when you know that you are taking care of TOMORROW!

For great financial health, you must first GET OUT OF DEBT and second INVEST for the Short Term, Long Term, and Long, Long Term.

Just think - with an accurate assessment of your income and expenses, you will always know whether you can afford to buy the items you fancy!

Please read the following points over several times to be sure you understand their importance.

• 1. Make goals and visualize them. If you are in debt, you need to have goals to pay off each outstanding debt and then create savings goals.

• 2. Accurately assess your current financial situation. Don't blame yourself for the past, but instead concentrate on the future! It may take a while to dig out of your hole, but keep your eyes on the mountain you will soon be able to climb!

• 3. When making your budget, decide how much you are going to save and then work backwards. Be sure you include a dollar amount for savings. If possible, have that deducted automatically from your pay.

• 4. Keep accurate and current records. Why? Because, as the ancient Chinese philosopher, Confucious says, "One Picture is Worth a Thousand Words!" You'll never make your goals unless you keep an accurate picture of where you are and where you are going. Habit makes it easy to keep up with the changing picture.

• 5. Remember - Everyone examines their finances before making major purchases. In fact, however, it's the quarters and dollars that add up to exceed the budget! Don't be fooled into thinking, "It's only a dollar". Remember if you say that ten times, it's ten dollars, and if you say it one hundred times it's one hundred dollars! If you normally spend $10.00 per day for snacks and lunch but decide to start bringing your own for $3.00 per day, you will save $1820.00 per year based on 52 weeks at 5 days per week!

• 6. Remember to reward yourself (within your budget) as you make each goal for a job well done!

• 7. Be an Individual, not a Conformist! This leads to greater creativity and inventions instead of always buying new! Don't try to keep up with the Joneses. They are being manipulated by advertisements to spend money chasing dreams that will make others rich. In fact, they are most likely in debt up to their eyeballs! Think of how much fun the simple pleasures, such as walking in the woods and camping with the family, can be! It really is true that some of the BEST things in life are FREE!

Are you ready to have some fun now? Please go to my article entitled 'Budgeting 101 - Personal Budgeting Made Simple' to learn details of a basic budget.

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Article Tags: financial freedom, how to budget, lottery winners, paycheck to paycheck, wealth management
Referred by: http://jaykubassek.com



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