My Wealth Builder has been sharing the principles over the past nine months in a number of posts. A few readers, who agree with the principles, have asked more more specifics on the hows. Being a firm believer in learning by doing, I will share the hows I have personally used as part of this saving challenge.
I first start with an overarching goal and plan.
Have an overall life goal. Money is a tool, not a goal. Money is a great enabler for what is important to one and one's family. My life goal is explained in Developing A Personal Mission.
Develop strategies and plans. Here are my three strategies:
- Maintain a frugal lifestyle and save.
- Preserve my wealth
- Grow my income (faster than expenses grow)
Here are the specific hows, which I will describe in more detail on the Fridays leading up to challenge start date of July 1, 2007.
Set a savings goal. How much of one's income should be saved? What is one's target saving amount at retirement. The answers are a minimum of 12% of one's income and a minimum of 12 times one's income, respectively. For some additional details, see How Much To Save - The NUMBER. More about this how on Friday, June 8, 2007.
Create environments and behaviours that enable saving. Saving is hard work and requires sacrifice - specifically delaying immediate gratification for future rewards. Changing environments and behaviours can significantly help. An example is buying only what one needs. More about this how on Friday, June 15, 2007.
Track and measure results. This is the most important part. How well one is doing versus one's savings goals is very important to know. I track my progress through periodic reviews. More about this how on Friday, June 23, 2007.
For more on Reaping the Rewards, check back every Friday for a new segment.
Photo Credit: morgueFile.com, Michael Connors
This is not financial advice. Please consult a professional advisor.
Copyright © 2007 Achievement Catalyst, LLC