Which do you suppose is more important, the amount of money you earn or the amount of money you spend? 

The amount of money you spend will have a greater impact on your financial success than the amount of money you earn.  Most people assume it’s the other way around.  You might think if you can just increase your income by 10% or get one more raise that you’ll be able to start saving more.  The reality is that if you don’t have enough money to save today, you probably won’t have enough money to save when you get that raise.  The people that have the most financial freedom got there based on the following principles:

• Save First – There are two types of people; the first type saves first and spends what’s left over.  The second type spends first and saves what’s left over.  The first type will become financially independent.  The second type will always struggle with independence.  If you’re the second type of person, make a commitment to change your habits.  Before committing your money to anything else, commit to saving at least 10%. 
• Identify Your Goals – What’s important to you?  Why are you working? Write down your goals and make sure they are measurable and attainable.  Keep track of your progress and make necessary adjustments.
• Track Your Expenses – This can take some work but it will be worth it.  Track your expenses for a few months at a time to make sure you know what you’re spending your money on.  You’ll be surprised what slips through your fingers.  Plug those holes and put the money towards something that is more important to you.
• Discipline – People spend most of their money when they aren’t working.  Remember, when you’re retired you’re going to have plenty of time to spend money.  Start being disciplined today and build that habit. 
• Use Cash, Not Credit – Save up your money and pay cash before you buy something.  You’ll feel better about the purchase and it won’t cost as much.  If you’re paying credit card interest rates the cost of your purchases can be 10-30% more than you realize.

The amount of money you spend is actually more important than the amount of money you earn. Take time to really understand where you spend your money and it will be the key to your financial independence.  Too often we spend money on things that really aren’t that important to us.  If you have questions or need help getting started give me a call at 425-945-1430 or visit my website at www.kevinskogen.metlife.com