Everyone has personal wealth to some degree, but when people talk about someone who is “wealthy”, they are referring to the fact that the individual has a large amount of money! So how does one go about becoming wealthy? Do you need to win the lottery or rob a bank?
Well the odds of you winning the jackpot on the National Lottery are pretty slim, and robbing a bank will guarantee that you will be detained at Her Majesty’s pleasure.
But did you know that there are some simple rules you can follow to maximise your wealth, and make your money work better for you? Here’s how:
Keep a tight rein on your cash
The downfall of many people when it comes to personal finances is that they overspend, impulse buy, and generally don’t monitor the amount of money they spend until it’s too late. Here are some top tips to help you keep a grip of your cash:
Pay off any debt – there is no point saving any money if you have a significant amount of debt, such as on credit cards or loans. It would be better to pay off those debts first, so that you will have more of your income at your disposal;
Stop paying out for unnecessary expenses – do you really need all of those channels on your satellite television subscription? Do you really need to pay £60 a month on a mobile phone contract that you hardly use? Consider reviewing your monthly expenses and giving any unnecessary ones the chop;
Don’t impulse buy – it might be tempting to buy something really cool that you saw in the shops today, but do you really need that item, or do you only want it because you think you should buy it?;
Shop around for the best deals – rather than buying a product from the shops, get yourself online and do some price comparisons. Consider using cashback websites such as Top CashBack to earn money on items you buy online.
Pay for things using your own money – don’t use credit cards, loans or borrow money off people to buy something, save up the money first.
Monitor your income and expenditure
Business have to do this so that they know exactly how well (or not, as the case may be) they are doing financially. By keeping a track on where your money goes and where (and when) it comes in, you will know how healthy your personal finances are.
You can use good old fashioned pen and paper to do this, or you can do it the 21st century way and use an app on your smartphone or tablet device such as HomeBudget with Sync.
Plan for the future
Although you should obviously manage today’s finances, you will also need to think about the future and put into place an income stream for when you retire, or if the worst happens and you have dependents to think of:
ISAs provide a tax efficient way of saving money;
Pensions allow you to have a source of income when you retire;
Life insurance pays out if you become permanently disabled due to an accident or upon your death.
It is also getting advice from a wealth management service for other useful ways to plan ahead.