We would all love to have extra money, and it would be even better to have enough money to never worry about finances again. According to 2013 UBS Investor Watch findings, being wealthy means living with no financial constraints, but investors feel that at least $5 million is necessary to be wealthy. We can all agree that being rich means living without worrying about your finances, but is $5 million really the magic number? It probably depends on the person. What we do know is that most people would be happy to never count their change again or worry that they won’t be able to pay a bill. If you have been trying to save for a long time or if you’ve simply given up on being rich someday, there may be specific reasons you are not succeeding. Read on to find out if you are holding yourself back.
1. You don’t plan for the future
You might wish you were rich, but if you don’t plan for the future, you will never be rich. Without a set plan, you won’t save money, and you will always have excuses (like telling yourself you can save when you’re older or that you can save more when you make more). A financial planner can help you set goals and stick to them. However, if you really want to start saving money now, you can also set your own goals and make your own savings plans. Start by looking carefully at your current budget. Determine with inflation how much you are going to make over your lifetime and include potential financial difficulties, as well (loss of a job, loss of a loved one, stock issues, etc.). Determine how much you need to save each month, and each year, in order to reach your financial goals.
Once you have set goals, one of the hardest issues you will face is actually sticking to them. Having a financial planner can help keep you accountable, but you can also talk to a trustworthy friend or your significant other. As you budget, you will also find that giving up certain items that you don’t need might help you become rich faster. Just for fun, check out Cool Math’s Give-It-Up-to-Get-Rich Calculator.
2. You spend more than you make
This one is obvious. If you have a combined annual family income of $90,000 but you are not saving any of it (or worse, you’re spending more than you make), you will never be rich. People tend to think that if they had more money, they could stay on budget. While this might be the case once in a while, the majority of the time, budgeting is the issue. If you can’t stay on budget now, you probably won’t stay on budget if you make $10,000 more in a few years, or even $50,000 more.