When my father first bought me the Wealthy Barber Returns, I was excited, as I knew David Chilton’s first book (The Wealthy Barber) provided me with excellent financial tools. Having a degree in business, I've always been interested in money and finances, and have always tried diligently to keep on top of my spending, savings and credit. No matter which life stage you're at, both The Wealthy Barber and The Wealthy Barber Returns are excellent and easy reads for anyone who is looking to improve their financial habits. Pick a copy up today; it’s your first step to financial freedom!
1. Don’t Live beyond Your Means
This is one of the toughest lessons from The Wealthy Barber Returns, but it’s a very important lesson to keep in mind. If you honestly can’t afford it, really don’t need it, and could live without it – then it might just be best to put it back on the shelf! I have definitely struggled with living beyond my means, as I found it hard to adjust after transitioning to a job that had a significantly lower salary. A thorough analysis of your income, relative to your current expenses is a good way to lay out how much money is available for the different categories in your life.
2. Don’t Forget to Pay Yourself First
To avoid severe financial stress, make room in your budget every month to automatically set aside 10 to 15 percent of your gross earnings into a savings account. You may not see the benefit now, but being set up for life’s unexpected kinks is an important way to be prepared for whatever the future brings!
3. Spending Habits
It’s amazing how relatively small cuts in your spending can really increase your savings. I noticed by simply being mindful of the price difference between grocery and health items at my local stores automatically saved me money! You may even be able to reduce your spending by checking for items that you regularly buy online; just be aware of the shipping and other costs that need to be factored into your pricing! Another good tip is trying to pack a lunch when you head to work in the morning, as dining out on a regular basis can quickly add up. It’s amazing how much money you can save by tweaking a few minor areas – watch that savings account grow!
4. Keep Borrowing to a Minimum
I have lost count of the times I have been asked if I was interested in signing up for a new a credit card from a grocery, department or convenience store – it’s shocking! The unfortunate side of being so easily approved for credit is that the interest rates on those ‘convenient’ store cards are significantly higher than any other form of credit, which can leave you in a pickle faster than you know it. A really good tip is to always say no when stores ask you to sign up for a new card and to keep your current borrowing to an absolute minimum.
5. Investment Smarts
Investments are not always as wonderful as one would hope. Many times, the prediction that mutual fund or stock fund winners are solid investment options just doesn't pan out. Instead of guessing where to invest your money, make smart and informed decisions. If you're planning to invest, make sure that you conduct some research before risking any money, and try to make decisions on the conservative side.
6. Saving is Key
When I was younger, I was always under the impression that putting my precious money into a savings account would mean that I would be sacrificing the things that I wanted today… As I got older I realized that I really did not have to sacrifice much of anything and I could simply enjoy the items I currently have. But money in your savings account? That brings much more joy than another shirt in your closet, that you probably won't wear anyway.
7. Your Future is Bright
What does your life look like five years from now? Ten? It’s really good to think about where you want to be in your future. It can help you put into perspective the importance of your financial decisions and how they may impact your life long-term. If you have not started already, contributing to your retirement savings plan on a monthly basis is an important way to ensure that you are taken care of in the future. If a portion of your earnings is automatically sent to your savings account and retirement fund, you won’t even notice that it’s gone! Your future can be as bright as the North Star if you plan wisely – I promise!
I highly recommend that you pick up a copy of these little pieces of gold today; I guarantee that it’s a great investment! What financial tweaks have helped you to grow that precious money of yours?