Create a bad-ass budget 

There is a reason the B-word is always the first word in personal money management. That’s because without a budget you won’t know where all your money goes, you’ll just wonder where it went.  

A budget is really just a way to set goals and track your spending. Knowing how much comes in and how much goes out is the foundation of a budget. Being able to see whether you are in surplus (more coming in than going out – the way to creating savings and wealth) or in deficit (more going out than coming in – the path to debt) you can make the necessary changes to live your best life.

Then you track what you’re actually spending. And just like that – you’re on the path to becoming a budgeting pro, may the force be with you. 

Avoid Bad Debt

Spending less than you make is how you build wealth, spending more than you have is how you get into debt and too much debt leads to a cycle of debt!

Debt, also called credit, is the obligation to pay money under an agreement. Borrowing can go one of two ways. You can borrow when you only repay the capital – or you can borrow where you also have to pay capital as well as an interest charge.

The reality is that people are spending a lot of money buying stuff and frequently they cannot afford it. And then they pay interest on it. Which makes everything more expensive. That’s how you end up in debt and being in debt makes it difficult to get rich.

Stop giving banks and other financial institutions permission to take your money. Always review your debt/credit agreements, avoid unnecessary purchases and always try 0% interest offers. 

Live below your means

Like most things in life – money is about balance. If you live beyond your means, living what we call a champagne life, then you are spending more than you have coming in. That means you’ll need debt to balance your budget. 

But if you live too frugally, and deprive yourself too much, you’ll eventually overindulge to make up for it. This kind of lifestyle can also lead to ill health, mental health challenges and social isolation as people reduce their spending in unhealthy ways.

The trick is to find balance and a lifestyle that’s sustainable whereby you spend less than is coming in. 

To learn more about good money habits sign-up to Blackbullion for some free financial education!