6 Steps to Support a Pay Yourself First Habit For Building Wealth

Many have claimed that their checking account balance at the end of the month does not change much even though different amounts were deposited into the account. I find this to be an interesting observation which suggest that if for some reason there is less disposable income, somehow or someway is found to make it through for the month. This observation alone is a powerful rationale for adopting the “Pay Yourself First” habit.
The following activities are significant ways to support the habit and build personal wealth.

1.Set a Goal -

Dr. Maxwell Maltz speaks of the “success mechanism” within all humans that keeps us searching for ways to reach our targets or solve our problems. You may set a goal of 1, 3, 5, or 10% more or less of monthly disposable income. Please be aware that at this point, the amount does not matter, but getting started does.

2. Reduce expenses and spend according to the goal -

Give transparency to your expenditures and identify the low hanging fruit – the expenses to reduce or eliminate. Examples are cable television, extra phone services, dining out, clothing, energy use, transportation, and entertaining. Negotiate with your creditors for reduction of interest rate, lower premiums, a discount with early payoff or principal reduction, suspended payments, or a return of the item. Do not be afraid to explore alternatives that will help you to pay your expenses. When spending, check if this purchase brings you closer to your predetermined goal.

3. Increase revenue -

A lesson learned from our present economy is the value of having multiple streams of income. Innovative approaches to provide services for people and the capacity of the internet have provided great opportunities for income producing projects. Other often hidden and unplanned costs to eliminate and increase cash flow are penalty charges, unnecessary fees, and the practice of theft prevention

4. Optimize the return on your increasing working capital -

Your accumulating capital from regular “Pay Yourself First” payments must be placed to receive maximal growth in regards to safety. Income growth will occur long-term from daily compounding interest, other types of investments of suitable risk, and an awareness of tax codes favoring income preservation.

5. Seek a mentor -

By believing in the vision as much as you do, the mentor can offer wise advice, show you “the ropes” and will invest the time and energy necessary for your development. The more open you are to this knowledge and insight, the more insightful these discoveries will be.

6. Establish a timeline for review and course correction -

You can develop a habit which will inspire you to perform at your full potential, but no one can do this indefinitely. It is invaluable to have a timeline for review, and someone, like a mentor, to provide dependable accountability and feedback so that, if necessary, course corrections can be made early.

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Posted in Personal Finance, Personal Income, Preparing for Wealth

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