So you have your budget — are you sticking to it?

OK, so you’ve calulated the percentages and numbers for your personal budget. It looks good. X amount will go to your 401K, long term neccessities, Y amount will go to that new car you’ve been wanting and intermediate neccesities, etc…, and put it all together and you’re on your way to wealth building in no time! It looks all neat and tidy, right? A clear plan, now all you have to do is follow it. And you most likely do….at first. Just with any new endeavor, after the steam of the first excitement wears off, you start to slip back a little into old habits. Here are some tips to keep you going and motivated to stay on that budget.

1. Keep your eye on the prize! I know, a bit cliche and overused, but it doesn’t make it any less helpful. A big part in doing this is knowing what you want. Ask yourself what is it you’re aiming for. Have you clearly defined your goal? Or is it just a gist of what you want? (e.g. I’d like to buy a house soon vs. I want to save $10,000 for a down payment by the end of this year) Know your goal, and remind yourself of it. Before you take that spontaneous trip to Vegas with the girls, take a split moment to pause and think: Will this make me happier in the long run? If you think, yes, go for it! If no, well that brings me to my next point.

2. Delaying instant gratification. We’ve all been told that the key to success is not eating that marshmallow. It makes sense. Why go for something and get less, when you can wait just a bit longer and get more. This principal strongly applies to your budget. You want to make it to Rock Star level of the Personal Budget Plan because that’s where you can start investing, and when you invest – your money makes money. This doesn’t mean denying yourself pleasures but rather planning for them. A few impromptu sushi and sake nights after work, some impulse buying here and there, and before you know it your NOW budget will be greatly diminished before you’re halfway through the month. Plan your pleasures so you can truly enjoy them guilt free.

3. Cold hard cash. It’s nice when you have it, and it’s also so painful to let it go. So, use it! Debit and credit cards make spending money a breeze. Sure debit cards pull directly from your account, but you don’t see or feel it happen. The physical act of holding money and then giving it to someone else leaves a much stronger impression than swiping a card. Cash does have it’s downfalls like the fact that you won’t have a paper trail of your transaction, but this is just another motivator for you not to spend money you don’t need to. You’ll have to write down that spending in your budget. It’ll make you think twice about whether you really need that purchase.

So those are a just few tips you can do to keep yourself on your budget. See what works for you because in the end we each have our own unique formula for keeping ourselves motivated. Cheers and Good luck!

Transforming Debt into Wealth!

Wealth Building Tip #4 is the DEBT STEP. Some folks think this should be #1. I strongly disagree. You MUST understand what money you have available before you can plan for living.

Here’s where my advice diverges from many other advisors. Why? I know you. I understand the difference between your student loans and credit card debt. All debt is NOT created equal….

***CAUTION: for those looking for quick fixes to wipe out credit card debt without paying for it, I am not for you!***

Manage your entire financial picture and to responsibly slay the debt monster. Transform your debt into wealth. It does you NO GOOD to wipe out your CC debt super fast only to have your car break down 2 months later . . . which ends up on what . . . yes, your credit card, again. Lather, rinse, repeat? No thank you.

Most people who dramatically slash their credit card debt end up incurring even more credit card debt later because they did not plan for emergencies. That is why you MUST complete these steps in the order given!

Building wealth takes time, be patient, be diligent. The rewards are well worth it. Control the beast. Transform your debt into wealth!

By now you have a pretty good plan. After a few months of success with WBTs # 1-4, you may be ready to tweak your plan a little bit. The beauty of building wealth is flexibility.

Make it work for you!