Financial Stress, Get
Ahead Financially, Become
Wealthy To-Do List
you want to eliminate financial stress from your life and start working
on becoming wealthy, this list tells you what steps to take and in what
order. It does not, however, tell you how to do each step.
For that, you have to read all of the numbered articles.
Think of this as more of a checklist of the things you should
already know from reading the articles here on the Eclectic Site
Financial Page. These steps are an adaptation of those taught by Dave Ramsey.
One: Create a budget to serve as a plan for
getting control of your money.
order to get on the path to eliminating financial stress and becoming
wealthy, you have to have at least a little bit of money left over at
the end of each month. A budget serves as a plan
to help you figure out where your money has been going, and to decide
where it is going from now on. Do not skip this step.
budget can be
time-consuming and a bit frustrating at times, but there is no way you
can get control of your finances if you don't have a budget.
have to trust me when I say that having a budget is absolutely a
necessary step to becoming wealthy. If you try to do it
budget, you will most likely fail. Do step one before doing
Two: Build up emergency savings of $1,000
got to have at least $1,000 in emergency
If you already have $1,000 set aside for emergencies, you can
skip this step and go on to step three. Just make sure that
you say you already have $1,000 saved up for emergencies,
that $1,000 is only
emergencies and is not just money being saved up for something else.
In other words, if you already know what this money is going
be spent on, then it is not
emergency money. An emergency, by definition, is something
you aren't expecting.
you don't have $1,000 for emergencies, then this step becomes
temporary life's goal. You need to concentrate hard on saving
$1,000 for emergencies and doing it as quickly as you possibly can.
The sooner you do it, the sooner you can go on to the
steps and the sooner you will be able to eliminate financial stress
your life. Do not go on to step three until you have $1,000
aside for emergencies.
Three: Become completely debt free except for
your mortgage if you have one.
the techniques taught in Eliminating
and begin paying off the debt you currently have. While
doing that, make sure you aren't still borrowing money and thus
debt. This includes charging anything to credit cards.
need to completely stop the use of credit cards while you are doing
step three. For most people, this step does not go quickly.
The average time to become completely debt free except for
mortgage is two to four years...yes, I said years. If
looking for a quick, easy answer, then what you learn here on the
Financial Page is not for you. However, if you want something
that works every single time, then what you learn here on the Financial
Page will work,
but can take quite a bit of time. Think about it this way, it
most likely took you years to get deeply into debt, so it is okay to
expect it to take years to get out. Besides, if you don't do
then two to four years from now, you will still be deeply in debt and
Step Four:Build up your emergency savings
to at least three month's worth of income.
is recommended that you eventually have six months worth of income
saved up. That level of savings will prepare you for nearly
of life's somewhat larger financial emergencies. But for now,
make sure you always have at least three months worth of income saved.
Five: Now that you are out of debt and have your
emergency savings built up adequately,
start putting 15% of
take-home pay into some sort of retirement account such as an IRA,
Roth, 401k, 403b, etc.
average income in the United States today is around $48,000 per year.
15% of take-home pay would be about $450 per month.
that were saved in a good Growth Stock Mutual Fund for 25 years, it
would grow to over $700,000.
your income and whatever amount of time you have until retirement, you
need to be saving toward retirement. It sneaks up on you
than you think and you don't want to wait until it is too late.
The longer you save, the more money you'll have.
Six: If you have upcoming
college education expenses for your children, try to save another 15%
of your take-home pay for college.
if this won't add up to enough to completely pay for college by the
time it is needed, it will certainly help to offset the ever-increasing
cost of a college education. For more ideas on where to get
for college, be sure to read Where To Get Money
If there is any money available after following all of the
up to this point, start working on paying off the mortgage if you have
Also, if you no longer
need to save money for
college, put that money toward paying off your mortgage. If
have no mortgage, then go on to step eight.
Eight: Save like crazy, invest, help others and
the time you have gotten to this step, you are following a budget, you
are out of debt, you have three to six month of emergency savings, you
are saving for retirement, you are saving toward college expenses, and
you have paid off the mortgage. Now, there is nothing more to
but to save, invest, help others and grow wealthy. You also
money available for fun, travel, cars, consumer electronics, etc.
You have done things that other people won't, so now you get
live like other people can't!
of a thousand miles
begins with just a single step"
Please know that all of the thoughts, information,
and techniques given on this site are nothing more than the author's
the matter being addressed. Do further research before making