Steps to Building a Strong Financial Foundation

Are you the master of your wealth? You should be!

In order to build a stable structure, you must begin with a heavy-duty financial foundation that will take care of you now while reinforcing your future goals. What do you need to do to put that structure in place? It is amazingly clear-cut. The tactics below will help to boost your monetary self-confidence and set yourself up for financial success.

Get Organized

Before you can proceed, you must be clear on where you stand financially right now. You can begin by developing a personal balance sheet. Make a list of each of your assets (what you own) and liabilities (what you owe). When you have gathered all your statistics this will give you a sense of your net worth.

Next, figure out your monthly cash flow and take a check of your credit. You can use a budgeting template like this one to help simplify the process.

Grow Your Net Worth

– Analyze your take home pay

– Make sure you are spending less than you earn. Keep track of your personal finances with a tool like Moneydesktop, which can empower you to take control of your finance and simplify your life.

– Manage your debt responsibly by making your payments on time and pay extra on all your consumer debt.

– Save money for your long-term goals. Open an employer sponsored 401(k) and make sure you take advantage of any employer matching programs.

Protect Yourself

Now that you are organized and following a growth plan you need to make sure you are financially safe. Try implementing these options.

– Build an emergency fund because life happens. It’s a must have to keep you financially viable – opposed to plunging into debt when you face an unexpected cost or other financial crisis.

– Check your insurance coverages. These types of policies will help to limit your out-of-pocket expenses when unexpected costs arise.

– Make sure you establish or update your estate plan. This may include updating your will, creating a living trust and instituting a power of attorney and a healthcare directive.

Prioritize Your Debt Reduction

Be conscious of over-extending by paying excessive interest on money you have borrowed. This can keep you from putting money toward your other financial goals. Debt repayment is a perfect way to start building your financial foundation. If you are interested in implementing a fast-tracked debt repayment strategy try the debt snowball method or another financial strategy to reduce your interest rates.

Define your financial goals

Now that you have put all the pieces together for your financial foundation it’s time to ask yourself what you want for both short and long term. Remember, your goals should be SMART: Specific, Measurable, Achievable, Realistic and Time-bound. Below are a few concepts to help you get started.

– Save for a down payment for a home

– Build retirement fund

– Save for children’s college

– Set up an emergency fund

– Save for bucket list vacations

– Become financially free

Now Let’s Make it Happen

– Be disciplined: Stick to the plan

– Maintain a balanced budget. You can’t be financially healthy if you are spending more than you earn.

– Automate your finances (regular money transfers from checking to savings, and online bill pay)

As you can see, constructing a financial foundation takes immense focus and determination. If you follow your step-by-step process you can’t help but see results. Most importantly you will begin to gain confidence in your capacity to create and stick to your new healthy financial life.

Buddha’s Guide To Wealth Creation – The Rightful Wealth Building Tips

According to Buddha’s guide to wealth creation, wealth building should be done patiently and gradually. How appropriate this advice is, especially in these modern times where we frequently see wealth builders make and lose very quickly in risky financial ventures, and many other people being duped and swindled of their savings by shady get-rich-quick schemes!

One who is wise and morally upright,

Shines like a fire on a hilltop,

He or she builds wealth patiently bit by bit,

Like the way bees gather honey.

In this way riches will be steadily accumulated,

Like an ant-hill that grows high.

Buddha’s guide to wealth creation should be done in accordance with Right Livelihood in Noble Eight-Fold Path. This simply means that occupations involving killing, the sale of animal flesh, and trading in humans, weapons, poisons and intoxicants should be avoided.

Wealth builders who build up his or her assets slowly and patiently is usually more stable and last longer. The wealth accumulated should be divided into four parts and used as follow:

One part should be spent on ourselves and our family, with a portion for charitable purposes.

Two parts should be used for continuous wealth building, such as by investing in our business so that it will remain viable and continue to provide a constant and ample flow of income. In the modern text, these two parts may perhaps be used in stable long-term wealth creation.

The last part should be set aside as savings for rainy day. Misfortune may strike at any time, and wealth builders should always be well prepared for it.

These are all particularly good reminders as we are nowadays constantly bombarded by the media fueling our greed for easy and fast wealth building methods, and making us crave for frivolous, expensive and ultimately useless possessions. Because of this, many people spend unwisely and get into excessive debt which results in financial difficulties. This of course will likely lead to domestic and marital problems, bankruptcy and even crime.

Thus while the Buddha’s guide on wealth creation may appear simple and conservative, it can be a constant reminder which if followed, will have a significant and positive impact on the financial well-being of most people, eventually leading to lasting prosperity and a happier life for yourself and your family too.