Know Your Budget

Only you really know where your budget spends to. Most of us always have thought in our mind including myself "if I was earning more money....then I would have some freedom". But the truth is the only way to create an excess it to spend less than you earn, instead of spending all that you earn. If you earned $3,000 and spending $3,500 you might end up spending $7,000 if you earned $6,000.

You can count your net worth by deducting the value of all the liabilities or loans you have from the income-producing assets owned to give you the net value of your income-producing assets. Do it now if you really want to achieve your financial freedom.

Let we think for a while, why aren't high salary earners retiring wealthy? Survey found that how much we earn, we spend, some of us maybe spend more than we earn and charge it on their credit card. That was a very “magical card” that makes us feel like a richer even though the truth is we end up caught with the debt.

Most of us do these steps, we pay the bills, shopping and spend what is left over, never put aside any left to save or invest. The right way is, we pay ourselves first by put aside an amount of our money for investment. It will control the temptation to spend it.

If you write down a list of your monthly net income, then in another column write down a list of the essential items that you have to spend money on. Work out an average of how much is spent on grocery shopping and petrol. Now before you start to think...."well I don't have any excess left...if I was earning more money....then I would have some freedom". The only way to create an excess it to spend less than you earn, instead of spending all that you earn.