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Learn the Language | Budget and Save | Save and Invest | Take Control of Debt | Protect Your Wealth
What would you like your net worth to be 5 years from now? 10 years from now?
Most people who have saved their money and built wealth didn’t do so overnight. They got wealthy by setting goals and striving to reach them.
A personal wealth-creation strategy is based on specific goals. In preparing your goals:
- Be realistic.
- Establish time frames.
- Devise a plan.
- Be flexible; goals can change.
- In the space provided, list your top goals.
What are your short-term and long-term goals for saving money?
Now you, like Jack, can choose how to meet those goals. This is where budgeting to save comes into play.
1.) SET FINANCIAL GOALS
When it comes to finances, people generally fall into the following groups. Where do you fit in?
Planners control their money. They budget to save.
Strugglers have trouble keeping their heads above rough financial waters. They find it difficult to budget to save.
Deniers refuse to see that they’re in financial trouble. So they don’t see a need to budget to save.
Impulsives seek immediate gratification. They spend today and let tomorrow take care of itself. They couldn’t care less about budgeting to save.
Knowing what kind of financial manager you are will help determine what changes to make. To maximize your wealth-creating ability, you want to be a planner.
2.) DEVELOP A BUDGET AND LIVE BY IT
When you develop a budget, you can plan to save. With those savings, you can:
- Put in a savings account.
- Invest in a 401(k) retirement plan at work.
- Invest in an individual retirement account (IRA).
- Invest in stocks, bonds or mutual funds.
- Use to pay off debt.
These are just some of the wealth-building choices available when you budget to save.
Source: Federal Reserve Bank of Dallas Building Wealth, 2006. Reprinted with permission. |
