So, do you want to live like a millionaire? The key point in all the stories about what wealth is that wealth depends on those small decisions you make every day to put money in your own pocket instead of someone else’s.
The ability to spend wisely depends on whether you are able to acquire only the things you need at the right time. These are your personal decisions that will lead you to either debt and poverty, or wealth and comfort.
Ready to get started? KCFEFCU.com has compiled a list of five things you can start doing today to take control of your finances and begin your journey to a wealthy life.
1. Save with automated systems
You pay your gas and electricity bills through automatic systems, but when was the last time you paid yourself the same way? Setting up automatic payments to your savings account is the first and foremost way to increase your savings.
Did you know that saving just $25 a week will save you $1300 a year? And if you can save $100 a week, you get $5400 within a year.
Saving $100 per week even at a minimum interest rate of 1% will bring you over $100K in less than 20 years (but you should look for higher rates, 1% is the worst case).
Regardless of how much you can save per week at the moment, the key is to get started. You can always increase your savings over time.
2. Pay off all debts
Having to pay off your cash advance loans Illinois will kill your goal of becoming rich faster than anything else.
Transferring high-interest rate debt to a lower interest rate credit card is a great option for those with multiple credit cards, as having a single account makes it much easier to make payments on all of your debt and tracks your progress.
A credit card with balance transfer capability can lower the interest you pay on the total debt, effectively cutting payments for you. This will save you money on monthly expenses.
Alternatively, you may want to consider a debt consolidation loan, which can usually be found at a significantly lower interest rate than the rate offered by credit cards.
If you have an unpaid mortgage, consider refinancing at a lower rate and try to make lump-sum payments.
3. Track your expenses
Food in a restaurant costs at least 300% of the price of ingredients you can buy at the grocery store. So, $18 pasta at your favorite Italian restaurant would cost you as little as $6 or less if you made it at home.
Cooking at home is quick, easy, and (most importantly) cheap.
How can deciding not to eat in restaurants help you become a millionaire? Let’s turn to statistics. According to the Bureau of Labor Statistics (a division of the US Department of Labor), food accounts for about 13% of the average household budget, and most of that money is spent on dining out.
You can save thousands of dollars every year simply by preparing healthy, delicious homemade meals.
For entertainment, attend free music festivals, art exhibitions, dance lessons, talk shows, and more. If something funny is happening nearby, take the time and go there.
4. Give up unnecessary expenses
What you definitely shouldn’t do is pay for services you don’t need. Review your monthly phone, cable TV, cloud storage, and gym membership bills, then discard what you don’t use.
You may decide to ditch cable TV altogether and switch to less expensive streaming options like Netflix or Hulu.
Then again, how can giving up television be a millionaire for you? Remember that any money you save will play into your hands in the future. Train yourself to make only reasonable spending. If you can make small sacrifices for a big goal, larger, more consistent decisions will become easier for you over time.
5. Set realistic goals
An important part of saving money is knowing exactly why you are saving it. The goal of “becoming a millionaire” is amazing, but it may be unrealistic in the short term, or too far off to motivate you enough now.
So what drives your savings? Down payment for buying an apartment? New car? Vacation? Home repairs? Pension? Start saving for a realistic goal, and the desire to become a millionaire will gradually begin to materialize on its own thanks to your efforts and the ability to handle money correctly.
Remember, time is very important for saving. It is possible that it will take you years to achieve your goals. But even so, continue to systematically move towards what you want.
You’ve already worked hard – now is the time to make your money work for you. In general, the sooner you start saving, the better.