How to Get Rich with Household Budgeting!

Getting rich is ultimately achievable by first stopping the process of becoming poorer.

When we think of How to Get Rich, we probably think of business tycoons like Richard Branson owning multiple businesses or real estate veterans like Donald Trump buying, selling real estate. Yet, initial wealth creation can start at a much simpler level. A very simple wealth creation fundamental is the rather unexciting yet highly powerful personal financial management skill we call ‘household budgeting’.

Household budgeting plays an important part in the process of eliminating debt, managing expenses and ultimately getting richer. Initially it can feel like an uninspiring task to undertake and ultimately manage so, not surprisingly, few people create a household budget and even fewer still stick to it. Yet it is an eye-opener for many people to learn that household budgeting is a key strategy in ultimately becoming rich.

The Leaky Bucket Syndrome

To demonstrate how vital household budgeting can be we can use a very simple illustration: Imagine that your job is to fill a bucket of water and carry it from point A to B. The more water you carry to point B, the better. However, your bucket is only half full when you get to B because lots of water has leaked out of numerous holes in the bottom of your bucket.

The obvious answer to this problem is: “Find a bucket without any holes in it dooh!”. But in the real world, where our income is equivalent to the water and our bucket is our bank balance, we often don't think about plugging up the holes. Instead, we try to figure out more ways to pour more "water" (i.e. income) into our "bucket"! This is fine so long as the leaky holes are plugged first.

Running your Household like a Business

The FIRST STEP in establishing any possible leaks in your bucket is to collect all of your necessary financial information. Start tracking all your expenses: categorize your expenses into both household and personal expenses; accurately estimate how much you spend on each on average each month.
The NEXT STEP is to enter your NET income (after tax) above the expenses and subtract one from the other to determine whether there is a negative or positive balance at the end of each month. If you end up with a negative balance do not reduce your original expense estimate to try and end up with a positive balance. We must be 100% honest with ourselves at this stage...

To read the full article and find out more techniques on effectively managing your budget go to: www.millionairemindsetsecrets.com