Money Rules: Making More Is Not Enough

Posted on Sunday January, 17 2010 | 0 Comments

Do you want more income? Do you mistakenly think that making more money will bring you immediate results? Will it help you reach your financial goals more quickly? My opinion is making more is only half of the equation.  To truly succeed with more you need to do the second half: direct your money.  Yes, you need to give every dollar marching orders. Below are some ways that making more can truly be effective:

  • Fund your emergency fund.  I recommend 1 months expenses as a good start.  The unexpecteds will happen to your budget.  You need a place separate for this money.  I recommend www.ingdirect.com. The set up time is minimal and you can link the account to your checking account for easy transfers.  Not having an emergency fund ensures that you will continue to accrue debt when 'life' happens.  This site also allows you to create more than one account. If you don't have savings accounts for vacations or Christmas, this is a great place to do so.
  •  Pay extra on any minimum payments.  If you have credit card debt, a great place to put 'more money' is paying the debt down quicker.  It's amazing what an extra $25 a month can do to help you pay it off sooner. (link here)
  • Pay off other loans.  Installment loans or automobile loans are a couple of examples.These are great places to spend 'more' money.  Don't just accept the terms you signed up for.  Use any extra monthly income to pay this debt down quicker. Check with the lender before your first payment to make sure there are no prepayment penalties on the loan.
  • Pay down second mortgage (home equity loan).  As I suggested above, be sure to check with your lender about any prepayment penalties before making any extra payment.
  • Pay extra on your mortgage.  If you have extra income after completing the above  suggestions, go after the mortgage.

Making more money is a great way to reach your financial goals.  The key issue is to HAVE A PLAN for where the money goes.  If money does not have a designated place to go, it runs away from you.  Did I leave any suggestions out? Please comment below.