When it comes to managing their money, people tend to fall into the following categories:
- Planners – Keep a very tight control on their finances. Use a budget to plan their spendings and try to save as much of their income as possible.
- Impulsives – Live for the moment, preferring to spend today and let tomorrow take care of itself.
- Strugglers – Have constant difficulty supporting themselves and have very limited, if any opportunity to save.
- Deniers – Tend to have some financial issues, but either cannot see the problems or just choose to ignore them.
If you want to grow your wealth and become richer, then you need to be Planners, like John and Pam.
John and Pam plan and control their finances, keeping a tight control on every penny. They save up for new purchases, rather than borrowing and focus on paying off their mortgage and providing for their future. Despite their modest income, John and Pam are able to provide a good life for their family and feel comfortable about being in control of their lives.
Contrast this with Steve the Impulsive. Steve has a good job and earns a high income, but he is also a compulsive spender, frittering all his money away on cars, clothes and going out. At the end of the month, Steve has no money left and has to use his overdraft until the next pay-check arrives. Worse still, despite all the money he earns, Steve has no savings or investments, owns no property and has no plans for retirement.
Life may be good for Steve at the moment, but things would definitely turn for the worse if he lost his job and without any savings for retirement, he is leaving himself completely exposed.
Unfortunately more people tend to fall into the categories of Impulsives, Strugglers or Deniers than Planners. Many have little control on what they spend and tend to spend more than they earn. Very few have even spared a thought for their retirement, let alone begun making any plans and the majority are encumbered with mountains of debt.
Becoming a Planner and Grow Richer
As I have stated beforehand, the best way to grow your wealth is to take control of your finances and become a Planner by learning how to budget and save.
The steps are straightforward:
These are all elements of the Wealth Creation Pyramid, a concept that outlines how you can become richer and more financially secure.
(Images for representative use only - courtesy of Free Stock Photos for websites - FreeDigitalPhotos.net and GNU Free Documentation License)
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