Some dream of winning the lottery even though the chances of that are basically zero. But being a millionaire doesn’t have to be a dream. In honor of National Be a Millionaire Day on May 20, 2022, let’s look at what is truly is achievable when you have focus, self discipline, and a plan. Let’s jump right in with a gut check on your financial mindset:
- $150 certification program for new job at work? Wish I had the money.
- $150 for new running shoes? Great deal.
- 1 hour a week to review your budget, spending, and goals? I’m too busy.
- 1 hour on Hulu or gaming? Daily occurrence.
- $300 in my 401(k) or savings per month? Can’t afford that.
- $300 a month for bars and restaurants? That sounds low.
- $1,000 to start investing? Seems risky.
- $1,000 for the latest gadget or cell phone? Had to have it.
Do any of these ring true for you? Having the right financial mindset is the foundation to success. There is a saying: “if you want to know what’s important to someone, review their bank account.” What would yours say about you? Are you a spender, saver, investor? If you have dreams of becoming a millionaire (or just saving enough to be confident about your future) every penny does count. Here are 5 important things to get you on your way to saving more for your future:
1. Review your spending. What money do you have coming in and going out on a monthly basis? Most people have a good idea of how much they make every month, but aren’t good at estimating where it all goes. You need to know.
2. Save more. Everywhere you can. Review all of your expenses. Which ones are important to you and which ones are just a bad habit? Start with the largest ones to make the most impact and work your way down. When in doubt, cut something out for a month or two and see if you miss it.
3. Set a savings goal. Is it a million dollars? Maybe, maybe not. But it helps to have a specific goal in mind. Create a budget, automate savings into an account (savings and investments) and start as soon as possible to let compound interest help your balances grow.
4. Spend less (a lot less) than you earn. This is key to reaching your goals. If you spend more than you earn, you’re probably racking up debt while living beyond your means. You can’t make progress unless you are consistently spending less money every month than you are bringing home.
5. Use debt wisely. There is good debt and bad debt. Good debt can include a mortgage (if you can comfortably pay each month) and sometimes student loans (if they help secure a good paying job and pay them off quickly). Stay away from bad debt like high interest credit cards, payday and personal loans where the interest is so high you can end up owing much much more than you borrowed very quickly.
Check your financial mindset regularly and remember, every penny counts. A lot of little savings can add up to big savings every month.