However, it’s not a bad idea to learn some of the secrets that create a millionaire.
Especially when it comes to managing money.
Some women tend to leave the financial management to their husbands. But if you are raising children solo, you have no choice but to handle your finances yourself.
Also, it may be a little more difficult with one income, especially if you were used to two incomes or the high income of an ex.
Below are 3 habits that I believe could be the beginning of your journey towards a six-figure net worth.
1. Spend Less Than You Earn.
Pundits agree that this is one of the keys to obtaining wealth.
It is probably the simplest, but hardest habit to adopt. Dave Ramsey shows strategies for creating this habit in his book The Total Money Makeover.
One way is to give every dollar a name. Meaning BEFORE you get paid, write down all your expenses and ensure every dollar is accounted for.
If it appears you have more money than expenses, the extra money may be used for any debt payments or towards savings.
On the other hand, if you find that there is too much month at the end of your money, you may need to find ways to cut down on expenses. I will suggest some ways to do that in a future post.
Or maybe you have stuff you can sell to bring in extra income. There is also nothing wrong with your teenager getting a part-time job to help with some of their own personal expenses.
However, you can’t beat the peace of mind that comes with knowing your bills are covered and you have no relationship with a bill collector.
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2. Track All Expenses.
In order to spend less than you earn, you will need to track what you are spending.
If making and sticking to a budget seems overwhelming, start by keeping all receipts. About once each week, preferably before your next paycheck, write down all the money you spent since the last paycheck.
You will start to see where you may want to cut back. Maybe you have been wondering where all your paycheck went. Track your expenses and you will not have to wonder anymore.
3. Pay Yourself First.
Some experts say put 5-10% of your pay check into a savings account. This may not work for everyone but it makes sense to put something away each time you receive income. Creating a savings goal may keep you focused. Tell yourself that this money you are putting away is to combat Murphy’s Law.
The best method is to, “Use a monthly automatic investment plan to build up a savings account that can cover up to 8 months of living expenses”. Suze Orman, Women & Money: Owning the Power to Control Your Destiny.
Meaning, have an online savings account and have the money go there directly from your paycheck — direct deposit. That way you don’t see the money and there will be no “need” for it.
While these 3 habits will not make you a millionaire right away, practicing them religiously will lead to a healthier financial future.
Whether you have a little or a lot, money needs to be told where to go. If not, you can quickly find yourself a slave to lenders. Because as Proverbs 22:7 says, “The rich rule over the poor and the borrower is slave (or servant) to the lender”.
In short, be the boss of your money. You’ll find it’s a willing and generous servant.
What is your biggest struggle with keeping track of your money?