Key #1: Have a job. This may seem obvious, but I've met people who can't understand why they are broke when they do not have a job. You need an income. And if one job isn't enough, you might need two.
Key #2: Have a written budget. This is just a written game plan of what is coming in and what is going out, with every dollar accounted for. Imagine an NFL team hitting the field on game day without any plays planned. Imagine building a home without blueprints. Imagine getting on a jet piloted by a pilot who had no clue where he was going.
Key #3: Avoid new debt at all cost. Stop buying stuff on credit. Stop living on credit. Burn the credit cards. If you don't have the money, don't buy it. If you are not sure how that works, perhaps this video will help:
Key #4: Pay off your existing debt as fast as you can. Get aggressive about. You are losing so much money each month on interest.
Key #5: Save money. You need to save money for three things:
- Purchases (remember, no new debt...)
- Emergencies (stuff happens... sometimes bad stuff)
- Retirement (don't count on Social Security to take care of you...)
In the next post I'll throw out 10 simple, practical things I do to save money. But they are useless if you don't have this other stuff in place.
If you want to learn more about this stuff, you need to be a part of my next Financial Peace University class. It'll start January 18th and be on Tuesday nights for 13 weeks and the cost is $100.
Oh, and if you've bother to read this far, I must mention that Pastor Scott is pretty cool...