Last Updated on Apr 17, 2020 by James W
Wealth, as you might have heard before, isn’t just about having a substantial income — although that is, of course, a key part of how people tend to become wealthy. Wealth is what happens when your income exceeds your outgoings in a consistent enough basis that you have a substantial amount of money set aside either in your savings account, or in the form of other assets such as property.
While you should always focus on finding new and improved ways of leveraging your position at work so as to get promoted, or paid more, it’s nonetheless possible to be in the top bracket of earners, with a mastery of CMC markets, and yet not be “wealthy”.
Here’s a guide to how you can stop letting your income drain away, and finally work towards joining the ranks of the wealthy.
Sleep on each substantial purchase for at least a few days before making it
The phrase “compulsive spending” tends t conjure up images of people recklessly throwing their money away on the slot machines, or buying overpriced trinkets which serve no real purpose in their life, on the spur of the moment.
For many people, however, this harmful approach to consumer decisions comes in a much more respectable guise. Compulsive spending can manifest when you buy that new exercise bike on the spur of the moment, determined that you’ll finally turn your health and fitness around. Or when, caught up in the desire to make your children and partner happy, you take out your credit card and book a holiday villa moments after thinking of the idea.
As a general rule, any substantial purchase you make should be left to sit as an idea for at least a few days — ideally a week or so — before you commit.
This is because sudden inspiration and excitement often blur our perspective on the logistics and responsibility of a decision. After a few days, that initial excitement should have worn off enough that you can apply your analytical mind to the issue as well, and determine whether it’s really the good idea it originally seemed to be based on your current circumstances.
Become a budgeting machine (and account for the unexpected)
“Budgeting” of a sort isn’t uncommon; most people are comfortable enough with setting a bit of money aside for the rent, or for business-related expenses.
Budgeting should, however, be something that applies to every corner of our lives. Your budget should include money set aside for “dining out”, “internet subscriptions”, and so on. Finally, your budget should include money being set aside for unexpected expenses. In this way, you control the purse strings on your bank account and avoid dipping into your savings unnecessarily.
Feed a certain amount of your income into professional development
One powerful way of preventing yourself from wasting money, is to set aside a chunk of your income every month for professional development, with the strict understanding that this money has a purpose and isn’t to be touched for any other reason.
This will force you to become more attentive to the rest of your income, and avoid assuming you always have enough to spend, and if done right, it will also yield dividends down the line in terms of improving your professional situation and enhancing your income.