Analyzing your plan of action
After reading dozens of articles, books and blogs on personal finance these past few weeks and coming up with Getrichtalks.com, a few helpful insights here and there have emerged. Despite of these information, I still haven’t laid down a concrete plan of action. Action speaks louder than words as they say. That is why If I really want change to happen I have to act on it. Finally, I was able to lay down a concrete plan to follow. Take this plan broken down into stages as your own.
- quit smoking
- minimize the late night drinking and partying to once or twice a month from my usual weekly session
- limit my shopping for gadgets and clothes
- lastly, instead of eating-out all the time we can limit this activity during weekends only.
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1. Sit down and analyze your current income, budget, bills, debts and spending habits.
2. Get a personal finance software and list all the details of your current finances. if you don’t have one you can try the free excel spreadsheets we linked a few days ago here. You will then have a clearer picture of your current net worth. I plan to pay off the bad debts but still have 10% of our income placed on emergency funds.
3. Focus on which bad debts you need to eliminate first and determine the means that will help you pay them off. With your remaining money, estimate the shortest months or years that it would take to pay off that debt. Set a target date for that and make it one of your goals.
4. After setting that goal, check how else can you save money in order to make a bigger payment on that debt that would shorten those months or years you have initially set. Make that another goal.
5. After setting your new goal make a checklist of the stuff you can live without-this will help you save more money. Live a frugal life. Here is my partial list. I will post the complete list in another article.
6. With the additional savings, you can add this to the money allocated for debt payments and some can be allotted for other opportunities that you can do to increase your income. This is when you need to be cautious. There aren’t any get rich quick process or easy money and there are dozens of scams everywhere specially online. I plan on selling some of my stuff, get more clients for my freelance web developing service, improve monetizing on my site and come up with new web ideas.
7. After reaching that goal, I can then focus on putting more into our savings, probably, increasing the percentage of my savings to 20% or higher.
I have already started stages 1-3 and now working on stage 4. One baby step at a time to get rich.
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