I’m sure most of you have played the board game, The Game of Life. The goal is to move around the board and try to make it to the end with a large pile of money. I played it when I was much younger and we would define what we considered winning at the beginning of the game. Sometimes, the winner would be the person that made it to the end first, and other times it would be the person when made it to the end with the most money. Either way, we defined our end goal. That’s one of the first steps you need to do in order to be able to win at the financial game of life. You need to define the goal you want to achieve. Once you reach that goal, set another even higher goal.
To be able to come out ahead in your finances, you need to be in control of your money instead of slave to the mighty dollar. Instead of having your income control your life, you want to be in control of your income. Learn to be the boss and tell your money what to do instead of having it tell you what you can and cannot do. It’s ok to boss your money around, in fact, I recommend it.
The first step is to list your monthly income and your monthly expenses. Yes that’s right, the dreaded budget. You have to put it on paper. Write down the fixed expenses first, next is necessary expenses such as rent and utilities, then identify your other expenses (I like but can live without), then credit cards and loans. By identifying your expenses in this way, it makes it much easier to get a better understanding of where your money goes. I’ll go into great detail on budget’s later.
Take your credit cards and cut them in half, burn them, destroy them. The main purpose of this is to make sure you cannot put any more on these cards again. You need to make sure that these cards are not available for you to add any more debt to what you already owe. Your goal is to eliminate debt and as long as you have the ability to use a credit card, you will most likely run up more debt.
Start paying down your current debt by eliminating your credit cards and loans. Pay off the least amount first then start working your way up until they are all paid off. Once the first card is paid off, take the money you would still be paying on that and add it to the next victim. Follow this process until all your debt is paid off.
You might be saying, if I could pay off my debt, I would have done that already. I am going to cover some techniques that will help you do just that. The hardest part is eliminating that first credit card. Then you roll that money into the next. In order to make this happen, you may need to make a drastic sacrifice by taking on another part time job to bring in a little extra income.
You also need to create an emergency fund. We usually get ourselves in credit card debt because we didn’t properly plan for the future. I’ll explain creating the emergency fund and when you should use it. Keep in mind there are also other known expenses that are not actually emergencies. I will also cover planning for these expenses so you don’t need to get yourself in debt and pay those outrageous credit card fees.
Once you are debt free, you have reached a major turning point in the financial game. You will need to maintain the financial freedom as well as start building your retirement and saving for the future. The earlier you start in life, the better off you will be financially in your future. If done properly, I believe that anyone can become a millionaire by the time they retire and you don’t need a six figure income to do it.
Your definition of winning at the financial game, might be different from mine. It all depends on where you are in your quest for financial freedom. If you are happy with paying off your all your debt, then you have won by meeting your goals. Maybe it is paying cash for a new car, which I have done and it is a great feeling and can be a lot of fun. For me, winning the game is when my money is bringing in enough income for me to live comfortably. At this point in life, I will no longer have to work for a pay check, but I can spend my time doing what I really enjoy.
I go into further details in other articles and I would love to hear your questions and know your thoughts and stories. Please sign up and leave comments so we can all work together to win at the financial game.