uccess With Money
uccess With Money
Your Personal Guide to Achieving Success With Your Money and Your Life
There are five primary goals which we set out to help you reach through this program. These are outlined on the introductory page of our web site:
In short, if you don't get in control of your money, you don't have a chance to be successful financially.
The basic principle is stated in the third law of money, The Law Of Control.
While each of us has a potential to live prosperously in constructive control of our financial affairs, this potential becomes a reality only when we live in harmony with proven principles of financial success.
It is amazing how people who are perfectly sensible when thinking about most other subjects become incredibly irrational when thinking about money. They know that if they want to be an author they have to write. They know that if they want to be a musician they have to practice. They know that if they want to swim they must get into the water. But when it comes to money they seem to think they can avoid the most obvious steps to financial success, steps easily observed in every single person who does well financially.
Let's get real about financial success. Money behaves in very rational ways. If we want to get in control of our money and become one of the prosperous, financially independent people in our society we must learn how money works and live in harmony with those principles.
Obviously I could say that all of the things I write about on this site, especially all the truths expressed in the ten laws of money, are essential principles to live by for success with money. And this is generally true. However, there are three particular practices that stand out from all the others when it comes to getting in control of our money and I want us to focus our attention on them now. If anything is more important than any other, these are the keys to your success.
In truth, these three practices are so powerful that I think I can safely say that without them success is impossible and with them success is almost inevitable. The best way you can guarantee your financial success today is to make a personal commitment and then find your own personal way to implement these three practices.
First, learn to live on less than you make. How obvious can it get? If we spend more than we earn we are doomed to failure, no matter how much we make.
There is much to be said for earning more money. If you are not getting ahead it is perfectly reasonable to think that earning more is the solution. Go for it! I highly recommend it. But the fact is, if you spend more than you make now you will likely spend more than you make when you make twice as much, three times as much, or even more.
Learning to live on less than you make requires first that we make a real decision to do so. In fact, this is probably the most critical part of it. It is easy to come up with a thousand reasons for our financial failures, but the truth is that if we are not now making the progress we should be it is because we have never decided to do so. And first of all we have not made a true commitment to live on less than we earn.
But in order to follow through on this commitment it is necessary to develop some specific skills that are totally new to many of our generation. It is necessary to learn how to despense our money in some controlled fashion. Years ago it was common for folks to cash their paychecks and then divide the money into envelopes, each one designated for a particular obligation: rent or house payment, food, car payment, utilities, and the like. It worked.
Our methods may be different. We may use checking accounts or even computer programs. Or maybe not. But every family and/or individual needs to find some way to despense their money so that only so much is made available for spending. When the assigned amount is gone the spending stops.
Second, learn to save. W. Clement Stone, one of the early leaders in the field of personal development, once stated it so clearly and forcefully you will see him quoted often even today, “If you cannot save money, then the seeds of greatness are not in you.”
If you want to do the right thing here you will have to buck the trend. Not only has savings been declining in the United States, beginning in January 2006 Americans dropped into a negative savings pattern for the first time since the Great Depression more than seventy years ago! In other words, people now withdraw more than they add to their savings.
It doesn't have to be that way. In fact in some countries savings rates are very high. The Japanese savings rate of 28% in 2004 sounds incredible to most Americans. Just the other day I read a newspaper article cajoling people in one country to spend more because they saved so much they would have more to live on after they retired than before. In short they were unnecessarily saving too much!
There is a popular piece of advice you will find almost everywhere. Save ten percent of your income. This is a reasonable goal. It should be the minimum acceptable standard.
But is it practical? You may not think so, but if you once decide that you will do it whether it is practical or not you will find that you can.
Here is a painless, more or less, way to implement this practice. This month save one percent of your income. That should be easy. Make sure that it is set aside for permanent savings, never to be touched. Then, next month save two percent. Then three. Keep on increasing one percent each month until you reach ten percent.
If necessary, but only if really necessary, go two or three months at each level. You will be amazed at how easily you adjust as you go along. But only if you think as if you have no option. You must begin making your savings payment just as you do your house payment. You must consider it a necessity.
The other day I received a bank advertisement with a great heading. It said, “Money in the bank changes everything.” When you start having money instead of owing money your life will change so much you will be amazed. And the best part will not be all the fantastic opportunities you can take advantage of financially. It will be the way you feel about your life.
Third, learn to practice money consciousness. Notice, I did not say “prosperity consciousness”. While that is an interesting topic, here I am talking about something entirely different. Money consciousness means simply that we are always aware of the financial implications of any decision we make.
Let me emphasize that this is not a negative or unpleasant thing to do. I draw attention to this because the first reaction I have gotten from some people is that this is just that, that it puts a damper on everything. The usual comment is that they just don't want to have to think about money everytime they do something. But this kind of thinking lacks understanding of the concept and reflects an unhealthy rather than a positive attitude about dealing with money in general.
Compare the practice of money consciousness to clothes conciousness. No matter what you do or where you go you are always aware of your clothes. With every activity you choose, you also make a conscious decision about the clothes you will wear.
To exercise you put on your sweats, or shorts depending on conditions. To attend a funeral you choose dark dress clothes. To swim you wear your swim suit. To attend a wedding...well, you get the picture. And you never say, “If I have to decide what to wear every time, I'm just not going to go anywhere again.”
It should be no different with financial considerations. It should be automatic to consider the cost of every activity in which you engage. If you are going out to eat it should be routine to consider comparative costs in choosing a restaruant and even more important, how much you have available to spend. It should be automatic to consider where to buy new clothes based on how expensive the store is to shop in and how much you can afford at the time.
When you do this it is essential that one of your options is always to decide that it would not be wise to take this action at this time because the funds are not available. At other times you can choose to wait until next month or next year, when the money will be there. Just never decide to spend when you cannot do so and stay within your available funds.
No matter what you do, considering cost should be routine, automatic, and natural in making every decision, every day, whether it be a small or large expense. Or even if it is one of those happy situations when you can say it has no monetary cost at all. Above all else it should be a positive, affirming experience. And it will be when, like all the other actions I am telling you about, it is seen as a productive part of achieving overall success with your money.
Here are the three essential practices in review:
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