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One of the biggest differences between the wealthy and the less wealthy is that wealthy people earn interest and everyone else pays interest. It is important to realize that money is a tool that can help you to achieve your goals.
For you to reach true financial independence, you need to have your money begin to work for you—not you for it. Here are some tips you can do to start making your money work for you. These can also help you break free of the bad financial habits passed down through your family. If you can follow them, you will begin to manage your money.

  1. BUDGET

The most important way to change the way you handle your money is to budget. When you are budgeting, you are making your money do what you want it to. By assigning each Rand to a category, you are controlling where your money goes and what it does. This will help you to begin to reach your financial goals.

If you want to change your financial picture, your budget is your first step to doing that. Often people will create a budget, but fail to follow through on sticking to it or stop after a month. You need to create your budget each month, track your expenses and make changes as needed, so you are always spending less than you earn. When you make the decisions on how you will spend your money at the beginning of the month, you can decide what priorities are the most important to you and begin to make progress on your goals.

 

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  1. SAVE YOUR MONEY

It is important to set tangible goals when it comes to saving money and building wealth. Your savings goals can help you to achieve your dreams. You can save money to buy the beach house or to travel to Europe, or to retire early. The amount of wealth you build now will help you to live more comfortably when you are older.

If you are looking for easy ways to save more money each month, you should look at your spending habits and see what you can adjust. This is a great way to save money for your vacation, a new car or a down payment for your house. Sometimes the expenses you do not think of like your morning cup of coffee can add up quickly if you just stop the spending habit completely.

 

  1. GET OUT OF DEBT

Do you know how much money you are paying in interest each month? How much of your monthly budget is being eaten up by loans, car payments, and credit card bills? If you could take all of that money and put it into retirement, it is amazing at how quickly you could save for your retirement and other things that you want. Debt often becomes a burden and limits the choices that you can make. One of the best things you can do with your money is to get out of debt and stay out of debt!

Take a minute to calculate how much you spend on debt payments each month. Pull out your credit card statements and other financial reports, tally your minimum debt payments, and then compare this figure to your monthly income. In a perfect world, debt payments should not exceed 36% of your gross monthly income. But if you’re spending 50% or more on debt payments each month, it’s time to make some financial adjustments.

 

 

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