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Step 1
Learn to budget. Each month, spend your money on paper before you spend a dollar out of your accounts. You'll learn how to get rich slowly if you know where all your money is going and allot categories for saving and investing in addition to living expenses.
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Step 2
Avoid credit cards and excessive debt. Credit cards can lead to a spiral of debt. Avoid that by never opening credit cards and paying off (and then closing) any open credit accounts you have. Save up enough of an emergency fund where you can feel secure without a credit card in your wallet.
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Step 3
Live on less than what you earn. This simple rule by itself, if followed, will make the most difference in your finances.
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Step 4
Save for emergencies. Build up a liquid savings account to tap into in case of emergency situations where extra (non-budgeted) money is needed, such as accidents, health crises, income loss, etc.
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Step 5
Invest wisely. Look for mutual funds that spread your risk over a large number of stocks, funds and indexes. Avoid sinking all of your money into one thing. And the bottom line ... if you don't understand it, don't invest your money in it! Learn more until you know what you are doing.
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Step 6
Increase your income (but keep your low-cost lifestyle). A raise doesn't help you to get rich slowly if you spend it all on things you don't really need. Work hard at your job, look for promotions within your company and keep your skills sharp. Consider adding a part-time business or side job to bring in more income if needed.
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Step 7
Protect your assets. Cover yourself with enough liability, health and life insurance to protect your assets and family from income loss, disability, and lawsuits.
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Step 8
Buy bargains. Avoid paying full price whenever possible. Search used book sales, consignment shops and other sales to get the most for your money. Use grocery coupons combined with supermarket sales to get the lowest prices on food. See Resources, below, for a great coupon source.
Comments
rbabi18 said
on 9/12/2009 This is an awesome reference! I give it 5 stars and have bookmarked it for future reference.
Cordially,
Randy
SucceedIn24Hours.com
andrea3967 said
on 2/9/2009 While there are some great tips here, I agree with the comment above. Closing off credit cards can lower your credit score. It's best to pay them off and don't touch them. Part of a credit score is calculating your debt to credit ratio. For example, you will have a higher credit rating if you have three open credit cards with a low balance on only one over a person who has only one credit card with that same low balance.
sunshine11219 said
on 1/10/2009 very good tips especailly #2 just to avid credit cards all together
Wally05 said
on 4/27/2008 It's definitely a good article, however I have to give a warning about step 2: "Avoid that by never opening credit cards and paying off (and then closing) any open credit accounts you have"
If you close a credit card account (even after it's paid off), that in itself will lower your credit score, so be careful.
bookmom said
on 3/31/2008 I really like this article. It has a lot to say to the average person trying to get ahead. Get rich quick schemes are tempting...but there's really no free lunch.