Whether you know it or not, most truly wealthy people will tell you that it is NOT about "how much do you make" as much as it is "how much do you KEEP".
Yes, it's important to "make more" but, at the same time, if you continue to "spend more" to the point that you fail to "keep more" you will never gain any ground with your financial future.
I'm sure you've seen "the pretenders" out there that walk among us. They drive a nice, fancy car, go out to eat at expensive restaurants and do all of the things that make them "look like" they are successful. But, truth be told, they are broke. They have more debt than they have income but they continue to do these things so that they can keep up an "image of success".
I've literally seen new, fancy, high priced cars in front of what I would call a shack.
This, my friend, is foolishness!
So, I want to encourage you to take the "DEFENSE" approach and think about how you can PROTECT the money that you have and not just let it slip out of your fingers.
In other words, like you see in the picture above, you MUST "plug up" that leaky bucket. This takes discipline, my friend!
Step 1: Get out a piece of paper and list everything you spend money on over the course of a week. Yes, I DO mean to actually have that piece of paper with you as you go through your week and write down EVERY little thing that you spend money on. THIS IS KEY! Why is this important? Most people have no idea how much money they actually spend on a daily and weekly basis.
Write down EVERY - LITTLE - THING. Don't just write down the amount but also write down what it was for so that you know. Do you pay to park while at work? Write it down. Do you stop in for a coffee on your way into work? Write it down. Did you contribute to an office collection for someone's birthday present? Write it down. Did you make a trip down to the vending machine and get a cola and/or a snack? Write it down. Eat your lunch at a restaurant? Write it down.
Get the idea?
Don't cheat on this. C'mon, just do it and, at the end of the week, add up your figures. I suggest that you even do this at the end of each day. (By the way, this also includes anything you spend money on via online sources. ANYTHING and EVERYTHING that you spent money on during the week.)
Once you have shocked yourself at how much money goes through your hands during the course of a week, not it's time to go on to the next step.
Step 2: Decide what you can cut out to reduce the "outflow". No, obviously, I'm not telling you to get rid of all of that all at once. Chances are there are some things that you listed that you cannot eliminate and that's o.k. BUT, what things CAN you eliminate?
Have you ever heard the phrase, "Defense Wins Games"? Again, it doesn't matter how much you make if you spend more than you make. So, WE MUST GET STINGY ON DEFENSE with your finances.
Maybe you can drop one thing on Monday, something different on Tuesday and so on during the rest of the week. For example, maybe you DON'T stop for that coffee on Monday and, maybe on Tuesday, you bring something from home for lunch.
Try to pick out at least one thing for each day and, if possible, even choose two!
Look at the list from the week that you wrote down all of these expenses and just base the amount that you didn't spend on that. In other words, if you wrote down that you spent $8.00 for lunch that week, go ahead and assume that would be what you SAVED by NOT doing that one day this week.
Then, we move on to...
Step 3: Put it in the jar! O.k. yes, you can just see that "on paper" and know that you saved money but I want to encourage you to take it one step further and PHYSICALLY take that amount of money and put it in a jar of some sort. Yes, go to your ATM if necessary and withdraw that amount of money and put it in the jar.
The visual for this is very powerful! Watch your jar fill up during this week and then, at the end of the week, count out how much money that you saved by taking just a little action and "playing some defense" to help "plug the leaky bucket".
Now it's time to "play offense" with your money!