Get Your Finances In Shape – Myers Barnes

Summer is over, so it’s time to turn your attention to whipping something else in shape besides your body — and that is your budget.

There is no doubt that a great deal of satisfaction in life comes from the ability to spend the money you make. Yet, in epidemic proportions, far too many good salespeople overspend to sustain a lifestyle they cannot afford.

If you’re between the ages of 35 and 64, you comprise the largest share of the population (53%) but you account for 63% of the overall spending in America.

Far too many salespeople have the attitude, "I work hard. I deserve it and I’m not going to deny myself something I want." OR, "The market’s good, so why should I worry about it?"

These are dangerous mindsets and anyone who has been in the peaks and valleys of the housing industry knows that a downturn or down-cycle can upset even a rock-solid economy. Suddenly, buyers fall away; contracts fall through; and your income falls short.

It’s easy to identify with Erol Flynn, who admitted, "My problem lies in reconciling my gross habits with my net income."

In my estimation, there are four basic things you must do to get ahead financially: 1) Live within your means. 2) Pay down debt. 3) Save money. 4) Work hard.

Living Within Your Means

In the book The Millionaire Next Door, there is a distinction made concerning the difference between wealth and income: Wealth is not the same as income. If you make a good income every year, and spend it all, you are not getting wealthier. You are just living high. Wealth is what you accumulate; not what you spend.

The surest way to grow wealthy is to live within your means. This does not involve depriving yourself and going without necessities, but merely spending less on indulgences. Do you have to live in a 3,500-square-foot home? Must you eat at restaurants so often? Is the car you’re driving satisfying your ego or your transportation needs? You get the idea.

Paying Down Your Debt

I read in USA Today that bankruptcy among those who are 65 years or older is up 244 percent. How can those who are living in the most abundant society in the world, after working their entire adult lives, claim bankruptcy? According to the article, the answer was credit card debt.

Paying down and ultimately eliminating debt is a step you must take before you can hope to save real money. Yet, most people have become "comfortably accustomed" to outrageous interest rates on credit cards as well as all forms of personal indulgence.

To get a handle on your debt, compile a list of your debtors — every one of them. Include the interest rates and payment schedules, and then pay off the balances, starting with the card that charges the highest interest. The key is to learn to pay these off and then to get into the habit of paying cash.

Saving Money

I’ve studied countless books and am fortunate to associate with many wealthy people. A universal axiom I’ve observed in wealth building is, "Pay yourself first."

Most people save money using the following strategy. They pay their bills, living expenses, indulgences and then save what (if anything) is left over. It’s sad to see professional salespeople earning high six-figure incomes who define wealth with a high-consumption lifestyle.

Save your money by implementing a plan. Simply saying you are going to save blank percent is too vague. The goal in saving is to acquire appreciating assets, income-producing assets, income-producing properties, real estate, mutual funds, bonds and other assets that work as hard as you do.

Working Hard

According to Brian Tracy, a recent study reveals that the average self-made millionaire worked 59.5 hours for twenty consecutive years to achieve his or her financial freedom.

Be real. To build your financial fortress, the forty hour work week will make you financially weak. In our society, forty hours is the average week of work. So, if forty hours is the average workweek, what’s the average income?

It absolutely amazes me when I meet people who say they want to earn extraordinary amounts of money for ordinary work. Although we do live in the land of plenty, opportunities for success are cleverly dressed in work clothes. Everything you want requires sustained effort, so you should be prepared to work long and hard to achieve it.

Forget the pie-in-the-sky, get-something-for-nothing outlook. For 99.9% of us, there is no free lunch. Your slice of the pie must be made for you — by you.

Avoid the misconception that winning the lottery or earning x-amount of money is all you need to be able to get your finances in shape. Building wealth takes discipline, sacrifice and hard work. The majority of those who receive cash windfalls end up as broke as they were before because they never developed the habit of planning ahead.

The question is, "Do you really want to be financially free?" Are you and your family willing to reorient your current lifestyle? If you are willing to start where you are, with what you have, make the necessary trade-offs and be disciplined, you can do it. Unfortunately, many of you will not make the adjustment — and, as your coach, consultant and motivator, that saddens me.

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