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Financial Help And Advice

Whether you are looking to save for the future, pay down debt, or fund your children's education, the key to true financial success is not making more money or getting sudden wealth. They key to financial success is living below your means. Any financial advice or financial planning program that you look into should teach you how to cut expenses so that you can truly live below your income.

Why is this so important? Most people live to their income levels, and this causes them to seek financial help when they really should have enough money for their needs. For instance, the business professional who makes $100,000 a year will likely own several vehicles, a large house, a boat, and perhaps a timeshare. After all, he makes plenty of money and "deserves" those luxury items. The problem is that owning all of these will cost him $100,000 a year or more. There is no money left for emergences or for saving for the future.

The problem that sends so many people seeking independent financial advice is that we tend to get a feeling of "entitlement" to certain things. For instance, after working particularly hard all year, we might feel as though we "deserve" to have a long vacation, whether or not we can afford it. Soon we are whipping out the credit cards to pay for things we really do not have to have.

So how can you accomplish this? Figure out what your annual income is, and then budget about $5,000 lower. You will have to work on a spending plan in order to make this work. Simply spending the money as it comes in will not suffice. If you live this way, you will spend every penny that you make. Also, learn to save for the things you want, rather than borrowing in order to buy them.

So what will you do with that extra $5,000? First, save it. You should have about three months worth of income saved for an emergency, such as sudden unemployment or an extended illness. Once you have this money in the bank, use that extra money to pay down your debts, excluding your mortgage. Once your non-mortgage debts are gone, invest! Imagine what your college or retirement fund will look like if you can invest an extra $5,000 a year! The only way you will find the money to invest is to consistently live below your means in order to free up the cash to invest.