Real financial health goes beyond budgeting. Living on a budget is important, but you have to keep your eye on the bigger picture - the reasons WHY you’re living on a budget.
The most immediate reason to live on a budget should be to get out of debt, and to stay out of debt. Your goal must be to begin living debt free.
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"No man's credit is as good as his money."
- Edgar Watson Howe |
You really can’t do anything else in terms of long-range financial planning without first getting out of debt. As long as you owe other people money, you are never really free.
To become financially independant and totally debt free, you have to get so fed up with being in debt that you vow to eliminate debt entirely.
To accomplish this, you should change the way to perceive budgeting. Getting beyond budgeting is not a goal you should strive for. Budgeting is a skill that should serve you well over your entire lifetime.
So what’s beyond budgeting and the steps to take once you are free from debt?
First, you'll want to establish a savings fund. You might have 401(k) plans through your employer, or a pension or IRA, or some other fallback plan for your retirement years. It also doesn’t hurt to establish a large savings account on your own, just in case of emergencies.
The extra cash you save could eventually be added to your retirement or go toward your children’s college education, daughters wedding, etc. Or, you could just keep it for a rainy day.
Someone who regularly saves, is also someone who has self-discipline and is therefore prepared, and even destined, for financial success.
One proven system is to save just 10 percent of your paycheck as a personal savings fund. If you can have more money routed directly to your savings account automatically, even better.
Depending on your salary, 10 percent will amount to anywhere from a few hundred to several thousand dollars a month. You could use it annually for a family vacation, home improvements, or other special rewards, or you could let it pile up year after year. In just a decade, you’d have somewhere between $40,000 and $100,000.
Think about all the marvelous possibilities when you move beyond budgeting and look at the long-term picture of enjoying a debt free lifestyle and living in prosperity!
The more money you can save, the more freedom you will enjoy as you’ll be able to take full advantage of opportunities as they come your way.
"Money was never a big motivation for me,
except as a way to keep score.
The real excitement is playing the game.”
- Donald Trump |
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Debt is NOT your friend. It's not a wonderful "tool" for building wealth. That's a myth.
