7 Signs your dreams of becoming a millionaire will never come true.
Do you hold your breath every time you check your bank account balance?
Are you shocked when your monthly credit card statement arrives?
Do you think you’re earning a good salary until you see how little is left over after taxes and expenses?
If you answered yes to any of these questions, then you’re not as good at managing your money as you could be…
Here are 7 signs that you need to improve the way you handle your money:
- You only have one stream of income
Not monitoring how much much money goes in and out of our accounts is like riding in a car with nobody behind the wheel. Keeping track of your monthly income and expenses is essential to financial security. If you’re spending more than you’re making, a thorough review of your expenses will help you get rid of the non-essentials and get on the road to financial stability.
- You focus more on saving than earning
There’s good debt like investing in your future to build wealth. Then there’s bad debt that comes from excessive credit card use and the resulting high interest rates. Paying those rates is like throwing money out the window. The more you use the plastic the deeper into debt you go until it’s almost impossible to pay it off. If you have credit card debt, pay it down as quickly as possible. Make this your top priority. The money you’re paying in interest could be used for real investments.
- Buying pretty things you don’t need
Once again, if you don’t keep track of your monthly expenses, both fixed and variable, how can you manage your money? Don’t get lulled into a false security because of autopay and think you can ignore your bills. Keeping on top of your bills means no unexpected phone calls from debt collectors or other unpleasant surprises. It also means a bigger chance of having something left over to invest.
- You give into comfort
Anyone who knows me understands that I don’t save money. I store it until I can invest it, most often in real estate. Saving money in a bank earns you next to nothing with today’s interest rates but regardless of whether you save or invest, you’ve got to put some money away whenever you earn it. 10% of your net income is a good place to start. You’d be surprised at how quickly it can add up. When it does, then you can multiply it like I did.
- You prefer safety over prosperity
Are you struggling to pay your bills? Think you’ll have to work forever because you won’t be able to retire? When’s the last time you spent money on something fun? If questions like these are constantly stressing you out, it’s time for a change which means it’s time for a change of strategy. People who manage their money rarely have to worry about it.
- You’re not investing in income-producing assets
I know what you’re thinking. “How can I invest when I can’t even pay my bills?” I’ve got news for you. Very few investors (including me) invest entirely with their own money. Borrowing money to invest is the kind of debt that gets you somewhere, unlike credit card debt. Even in this economy there are opportunities particularly in real estate, which I know a thing or two about.
- You’ve got no emergency fund.
Safety net. Backup. Money cushion. Whatever you call it, you need to have money on the side for emergencies because they happen to us all sooner or later. Not having any money put away means you’ll have to put it on the card when an unexpected situation occurs. That means getting deeper in debt. Plus, there might be some situations where you can’t just break out the plastic. What if you and your family have to flee a natural disaster that’s knocked out the power? Scenarios like this make it vital to have some sort of backup funds. The only way to make that happen is responsible money management.
Look, I get it. I know what it’s like to stretch a dollar and live paycheck to paycheck. Sometimes I didn’t even have a paycheck. When I started out I didn’t know anything about managing money because I had no money to manage. But when I had finally had enough of being broke and struggling, I began to study people who had money and what they did with it. Then I became disciplined and put what I learned into practice. Now, when it comes to money I can tell you I don’t worry about it. I think about how I can multiply it. I’m sure you’ll enjoy it as much as I do.