Planning Personal Finances - Become Rich! Live Your Dreams!

Most of us dream about being rich but few of us seriously think about how to achieve it. We imagine a win on the lottery or at Las Vegas. We fantasize about how we would spend our winnings. We do not take steps to improve our financial situation.

The lucky windfall can happen, but by its nature it is rare. Most of us will never experience such a chance event. It is better to develop a plan our finances just as a we would set out a business plan if we were setting up a business. Getting rich is not a matter of chance it is down to hard work and application.

If we have not inherited wealth we must plan how to increase our income. Even if we have inherited wealth it pays to plan how to maximise what we have. Many people who are fortunate enough to inherit money fritter it away in unplanned and wasteful spending.

If you are a young person starting out in life with no inherited wealth one of the best things you can do to improve your finances is to postpone marriage. Marriage is an expensive business. It means buying a house and everything that goes with it. It also means that you may be tied to one place and unable to move to find work. At the start of your career you must be prepared to be mobile in order to advance your career.

Some employers claim they like married employees but then expect them to work long unsocial hours. Long hours will put a strain on any marriage. If you do marry then postpone having a family. Children are a serious expense. There is health care, education and a whole host of expenses to consider.

Health is one of the most important factors in economic well being. Ill health is expensive. It means doctor's bills and loss of earning potential. So do not take risks with your health. If you smoke then give up. If you are overweight then lose weight. Obesity and smoking are major health risks. Take daily exercise. Walking or running are cheap enough for any one to afford.

Above all, avoid getting into debt. This is one of the easiest temptations to fall into. Credit is so easy. Store cards, credit cards, personal loans, mortgages all drain your income. Buying a house may be a good investment in a period of rising house prices, but in a period of falling house prices it is not. When house prices are collapsing you may get a good deal to rent.

Never buy on impulse. Obviously you need to buy things. You must have a working wardrobe if you are to be taken seriously by an employer or a business contact. But plan what you buy. Make the things that you buy last. Buy for quality. Always check out the sales and stock clearance outlets. You need to aim for quality and value.

Saving is vital if you are going to improve your personal finances. You should get into the habit as early as possible. If you have savings you can avoid debt and have a cushion against unexpected expenses. Aim to have twice your monthly earnings in reserve.

Remember though that money is only a means to an end. Do not become so obsessed with money that you cannot be happy. There is always someone with more money than you.