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| Build Wealth Not Debt | ||||
Your Game Plan for Building Wealth!
1. Live within your means. Your income must be more than expenses. If you're not sure, keep a record of your spending.
2. Never refuse free money. Participate up to your employer's match in employee savings plans. Yield on savings matched by the employer is an immediate 100% plus any future earnings on that investment and match.
3. Build an emergency fund. If you have high cost credit, such as credit card debt, your emergency fund should be equal to 2-3 months net earnings. If high cost credit has been paid off, the emergency fund may be built to 3-6 months net earnings. In addition, save for any large purchases planned.
4. Pay of high cost debt. Stretching credit card payments out by paying only the minimum payment can result in thousands in interest and years to payoff. Paying even a small amount ($10-$20) more than the minimum each month can save large sums in interest.
5. Purchase a home. Most Americans build wealth through home equity. Investment in a home grows through payment on the mortgage principal as well as increase in the value of the property. Well chosen real estate property is expected to increase around 3% a year.
6. Maximize contributions to tax-deferred savings. These may be 401-K, 403b, or 457 accounts for employees, or Keogh, SEP, or SIMPLE accounts for those who are self-employed. Depending on your tax bracket, you may realize up toe 39% savings increases by tax-deferring savings dollars.
7. Develop specialized investment. These may be Roth IRAs, specialized stocks, bonds or mutual funds, investment club accounts or other investments.
Monthly Savings |
Yearly Savings |
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| Save $.50 a day in loose change | $15 |
$180 |
| Drink one less soft drink a day | 22 |
264 |
| At work, substitute one daily coffee for one cappuccino | 40 |
480 |
| Bring lunch to work (saving an estimated $3/day) | 60 |
720 |
| Eat out two fewer times a month | 30 |
360 |
| Buy grocery store brands | 10 |
120 |
| Cut cigarette consumption by 2 packs per week | 24 |
288 |
| Eliminate premium cable channels | 20 |
240 |
| Use fewer phone features | 10 |
120 |
| Borrow, rather than buying, on book a month | 15 |
180 |
| Comparison shop for gas (saving an estimated $.25/gallon) | 4 |
48 |
| Maintain checking account minimum to avoid fees | 7 |
84 |
| Pay credit card bill on time to avoid late fee | 40 |
480 |
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