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Simple Ways to Keep More of Your Money

May 22, 2008
Here is a powerful yet simple technique that allows you to have more money for your business starting today!

There was a time in my life when I went from a tiny income to a six-figure income in a short period of time. From my experience, I found that if you don't control your spending, you don't see a huge difference in your financial stability even if there's a huge increase in your income.

Obviously, with a larger income you have more opportunities. You can buy more and do more as well as live a better lifestyle. You may feel financially stable, but if you don't control your spending, then your financial stability does not really improve. It's not how much you make, it's how you control your spending that makes a real difference in your financial stability. If you make $10,000 every month and you spend $12,000 monthly, at the end of the year you'll be $24,000 in debt even though you earned over $120,000!

Tom had a goal. Within two years he wanted a monthly income of over $4,000. He accomplished his goal within that timeframe. The only thing missing was financial stability. Even though Tom increased his income, he also increased his spending by almost the same amount. He reached his income goal, but the real goal was not $4,000 a month, it was financial stability, and he didn't accomplish that because as his income grew, so did his spending.

I'm sure you've heard stories from Hollywood in which famous people with enormous incomes have gone bankrupt. Most of the time, the problem is excessive spending. Celebrities usually make and spend enormous amounts of money.

You don't need to change your business drastically to become financially stable. You don't need to become cheap, you don't need to suffer, and you don't need to change your lifestyle drastically. You DO need to become aware of your spending habits and control your spending carefully.

I know what you're thinking. "How can I save when there's nothing left? All my income is accounted for."

You're right. All of your income is accounted for, but you have spending habits you're not aware of. The only way to become aware of them is to get clear about the way you spend money. To keep more of your money, simply spend less of your money!

Here's an example. On your way into the office, you stop by and grab a coffee and bagel and the morning paper. It's no big deal, right? Lunch comes around and you're out another $5. On the way home you have a soft drink for another $1. It's only a few bucks right? Well let's take the total, $8, and multiply that by 240 working days. That's $1,920 a year.

It's not my intent to tell you how to spend your money; my point is that you must be aware of how you spend it. In the above example, put away $1920 a year in a good retirement plan and with enough years you'll end up with a worthy retirement fund.

The only way to understand your spending habits and see patterns emerge is to record your purchases. Every single one. If you don't, you won't be able to see the areas that will allow you to cut out excessive or unnecessary spending. You don't have to do this forever, but do it for at least one month. To benefit from this article and have more money without increasing your income or profits, you must record your daily spending.

Once you identify the areas where you're spending too much money, you'll be able to cut down in those areas. Controlling your spending starts with your thoughts. If you can control your thoughts, you can easily control your spending.

Here are a few tips for controlled spending

* Avoid window-shopping, browsing the web, or anything that gives you opportunities to make purchases that you don't need. My friend Bruce once told me, "Stay out of the stores!" He said, "Here's what I do if I need something. I go into the store, grab it, and get out!" Every time I'm in a store, his voice echoes through my head: "Get out of the store!"

* There's a difference between a want and need. You require needs, but you can live without a want. Get your needs, and control your wants.
* To control your spending, simply ask yourself a few simple questions like: Do I really need this? Can my business survive without this? What am I giving up if I buy this? Where can I put this money to better use?
* If you're working long hours, and your sales and profits are just enough to make ends meet, then you're spending too much money.
* If you re just making payroll, and if you have bills that are piling up, then you're spending too much money.

If you don't have any money saved and you have a lot of debt, then you're spending too much money. So basically, you're in a prison controlled by your finances. Every time you make a purchase, you're trading some freedom for the purchase. Become aware of this fact. Invest in your freedom, not in items you buy.

Action Steps To Help You Increase Your Income

1. Identify your spending habits. For at least one month, list each purchase you make every day.
2. Reduce or cut out those areas where you have excessive or unnecessary spending.
3. Use questions when you make purchases, such as: Do I really need this? Can my business survive without this?

Important Points to Keep In Mind When Increasing Your Income

* If you don't control your spending, you don't see a huge difference in your financial stability---even if there's a huge increase in income.
* You may feel financially stable, but if you don't control your spending, then the financial stability does not really improve.
* It's not how much you make, it's how you control your spending that makes a real difference in your financial stability.
* You do need to become aware of your spending habits and control your spending carefully.
* If you don't have any money saved and you have a lot of debt, then you're spending too much money.
* Every time you make a purchase, you're trading some freedom for that purchase.
About the Author
Acey Gaspard brings his 20+ years of business experience to A Touch of Business with over 1,100 ORIGINAL pages of tips, reviews, and tools to help you market and run your small business.
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