However, with so much information available people can also get bogged down in the “how’s” looking to take too many paths. If you’re someone who is just starting from scratch these are the most basic things you should know about money. Once you learn these you can apply them to your own unique life and build from there.
# 1 – If You Want Financial Stability You Must Spend Less Than You Earn
Just like most things in life, solid personal finances require some hard work and sacrifices. While it might be nice to turn every dollar you earn into a monthly payment via consumer debt (for a car, furniture, motorcycle or whatever else floats your boat) that is the process that starts paycheck to paycheck living.
If you want to build financial stability you just need to master this most basic concept: spend less than you earn.
# 2 – Consumer Debt is What Makes Most People Broke
Consumer debt is the reason most people in the American culture are broke. It’s the “keeping up with Joneses” and feeling the need to impress other people.
To avoid this you need to have a strong “why” behind your money motivation. What is it that you want out of life? Early retirement? Financial freedom? A new house?
The answer really doesn’t matter. Every single person on this Earth is motivated by something entirely different. Therefore the answer of what you truly want cannot be wrong. You just need to define what matters most to you and then map out a plan to get it.
This requires hard work and delayed gratification. It also helps you avoid ridiculous, expensive consumer debt. This because you now know that purchasing X will only hinder your progress on reaching your goals.
Avoid consumer debt with a strong “why.”
# 3 – Investing is How You Make Your Money Grow
Investing is how you make your money grow. There are a thousand “right ways” to invest. The path you choose to take is dependent upon your own knowledge, personal preferences, and risk tolerance. Typical paths include real estate
If you want to make your money grow you need to invest it in some capacity. Figure out what works for you.
# 4 – You Are Not Tree (Or, You’re In Control of Your Life)
Last but definitely not least – you are in control of your life.
You can seriously have anything you want in life if you’re willing to make it happen. Nobody controls you and YOU are the one in charge of your own decisions and therefore your own life.
You are not a tree. If you don’t like where you’re at move.