If you’re reading this article you’ve most likely experienced the unpleasant sinking feeling of financial insufficiency at some point in your life, or you know someone who has. One of the most challenging parts of getting a grip on your finances is keeping track of where you’re actually spending all of your money. The recurring expenses are obvious — rent, groceries, utilities — and are fairly easy to keep track of as you do your best to manage your money and the health of your financial goals.
You don’t have to be a high-income earner to have enough money to create wealth, but you do have to have one thing — awareness. You must be aware of where all of your money is going.
One of the most effective ways to create a positive financial change in your life and to escape the money trap is to manage the leaks. The leaks are simply defined as all the money you have that escapes from your savings or checking accounts unnecessarily. The leaks can range from a monthly subscription you may have forgotten to small purchases that are broadly categorized on a credit card (membership fees, restaurants, coffee purchases, etc.). The leaks can also come down to how much you pay in taxes.
I often tell people that it’s not so much about how much money you make as much as it’s about how much you keep that matters in creating real wealth. A lot of that has to do with saving strategies, most especially on taxes. There’s enough information on how to win the tax game that several books have been written on the topic. For the purposes of this article, however, let’s focus on where you can make the biggest impact right now — the small, seemingly insignificant expenditures (the leaks) that quickly add up — often enough to be a difference-maker in preventing you from creating wealth.
To manage the leaks, you first have to find them. That’s a bit easier said than done, but, rest assured, it can be done. In fact, if your goal is to create wealth of any kind, it simply must be done.
If you’re like most people, you quickly learned how to manage your money well enough to meet your basic monthly obligations. And, if you’re like most people, that’s where you stopped being as concerned about the health of your finances as you really should be. Here’s an example of what this looks like:
Get a job.
Make a living wage.
Find an affordable place to rent.
Pay the rent every month.
Pay the utilities.
Buy some groceries.
Spend any leftover money you may have on things you don’t keep track of and don’t really need.
Now let’s take a look at some ways you can better manage the leaks to create the kind of wealth that’ll make a difference in your life.
First, awareness is everything when it comes to your money and how it’s allocated among your needs and desires. The fact that you’re reading this article validates your awareness. So, congratulate yourself on getting this far.
Next, you must have a determined desire to change. No one cares about your money as you should. Without a determined desire to do whatever it takes to create wealth, you will likely quit and fail. Quitting should never be an option when it comes to mastering your money.
Nothing ever happens without action. Fortunately, mastering your money doesn’t take a master’s degree, but it does take action. The good news is that even small actions produce results. When I started learning how to create wealth, I started with $25. Period. It was all I had…until I discovered the leaks.
When I told my mentor that I didn’t have $25, he showed me how to manage the leaks in my spending habits. He stressed to me the importance of being determined to discover the leaks and how important it was for me to act on my discoveries. When I convinced him that I was ready, willing, and determined to change, he agreed to help me. He actually helped me to discover that I had roughly a $125 per month leak that needed to be plugged. The leak came from various (and seemingly insignificant) things like a $10 membership fee I was no longer using, overpaying for car insurance to the tune of $50 every quarter, joining the crowd to eat out.
Once I became aware of the leaks, I took immediate action to change. In fact, I invested my first $25 based on the projected savings we discovered — a huge leap of faith for me, but a commitment nonetheless. I’ll admit, that first $25 was the toughest money to part with. But the reality of it was that I wasn’t really parting with it at all.
The first lesson I learned by taking action was that, with every dollar I had set aside to create wealth, I was actually putting that money to work to create more money. This is where the magic of a money mindset comes to life. Once you understand how to make money work for you (instead of the other way around), you make an immediate shift in the direction of creating wealth!
Now it’s your turn. Are you determined to stop the leaks and reclaim your hard-earned money? Are you ready and committed to putting that money to work for you instead of wondering where it goes every month? Even if you manage to discover $25 per month, it’ll be the start of a highly significant transition in your life that’ll pay huge dividends later in life.
Here’s to Your Best Life!
To learn more, stop by my website garywestfal.com, where you can connect with me on this, and several other personally-empowering topics.
Here’s to Your Best Life!
