Identify your Spending Habits

"There are different levels to financial freedom. The first level of financial freedom is when you decide to take control of your finances," says Mike Peterson, author of "Reality Millionaire: Proven Tips to Retire Rich" and co-founder of The American Credit Foundation.

The problem is that most people can't account for about 15 percent of their income month to month. With that in mind, it is almost impossible to be realistic with balancing your budget. By following these three proactive steps, you can be on your way to overcoming debts in record time, building emergency savings, and investing to retire rich.

Identify and list the fixed items in your budget like rent, mortgage, car payments, other debts, childcare, and insurance. Next, list all of the regular places your money goes. Manicures, pet care, and a diet coke every time you gas up almost always are taking a larger toll than you imagine. The only real way to get a handle on this is to track your spending, preferably for a whole month but at the very least a 7-day period. Don't change your spending habits while tracking them, just take note.

Once you know where your money is going, you need to identify what is optional spending and what is necessary spending. This will enable you to make new choices and new spending habits. Remember that one of your necessities is to have emergency funds. There are many times unplanned and irregular expenses are necessary.

Set some debt repayment and investing goals. When you get excited about these goals, you'll actually be able to take pleasure from denying yourself some luxuries that aren't necessary in order to pay for your new goals. With a few small changes, most people can free up 10-15 percent of their income each month.

**********
About the Author
Dr. Proactive, Randy Gilbert producer of Inside Success Radio, enjoyed learning from Mike Peterson, (http://www.realitymillionaire.com)author of Reality Millionaire: Proven Tips to Retire Rich", who was interviewed on The Inside Wealth Success Show by Jay Aaron. Get many more tips by enjoying the entire interview for free. Go to http://www.InsideSuccessRadio.com/Guests/Mike.Peterson

Category:

News & Politics

Tags:

• mike
• peterson
• inside
• success
• proactive
• interview
• financial
• analyst
• debt
• management
• millionaire
• planning
• roth
• ira
• finance
• credit
• tools
• money
• education
• investment
• invest
• help
• retire
• retirement
• goal
• cash
• save
• rich

[sneakage]

I know through experience this is real.