Wednesday, August 12, 2009

Money Mistakes Series - 4

Sports and money don’t build character as much as they reveal character. - Rennie Gabriel

The money mistakes series deals more about attitudes, beliefs and values than specific tips.

Mistake # 4: If I just made more money everything would work out fine. This is one of the biggest lies we can tell ourselves. Just like an alcoholic can’t get enough liquor or an overeater can’t get enough food, more money will not solve a problem of over spending. Things work out fine when expenses are addressed first, and figuring out how to increase your income is addressed second.

Solution: Start by listing your fixed expenses, like mortgage or rent, car payments and insurance. Next, list your variable expenses, like food or utilities. You will have these each month, but the amount will vary. Finally, list your discretionary expenses. These are the items you have complete control over like entertainment, clothes, meals out or vacations. When you include the items that don’t show up every month, like taxes or auto repairs, and convert them to a monthly amount, you will have a picture of your total monthly expenses. Now make this smaller than your monthly income and also factor in regular monthly savings.

Rennie Gabriel –
Author of Wealth on Any Income: 12 Steps to Freedom

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