Did you know that 76% of Americans are living from paycheck to paycheck according to 2013 research done by Bankrate.com? Here are seven steps to break that cycle in your household:

1. Establish and follow a budget.

Your budget is your spending plan for your money. Without a plan you are bound to work outside of the boundaries of your income. It is important to establish and then follow a budget on a monthly basis.

2. Educate yourself financially.

An educated choice is always the best choice to make. Educating yourself financially means to begin reading books, articles and blogs that are related to finance, especially personal finance. It also a good idea to listen to some podcasts and television shows that relate to the subject area.

3. Clean up your credit.

There may be some things on your credit report that is causing your score to be lower than it should. These are the items that need to be straightened out. Your credit report should also be checked for accuracy – late payments, credit balances, etc. Have your report review and make it a priority for the first quarter of 2016 to “fix” your reports and scores.

4. Establish and Continuously Fund Five Funds.

There are at least five funds that everyone should establish:

Ø G.O.O.D. (Get Out Of Debt) Fund

Ø Vacation Fund

Ø Retirement Fund (outside of your employer sponsored fund)

Ø Investment Fund

Ø Replacement Savings Fund

5. Investment Plan.

Create an investment plan. Simply saving money is outdated and no longer works effectively in this economy. Therefore your ability save money has to be mixed with a good investment plan in order to generate wealth. Be sure to read my free e-book entitled, Income Producing Assets, which can be found at www.fredericktowles.com.

6. Put your blindfold on.

Forget about the Jones’ unless they are related to you! Don’t look at what anyone else acquires. This is the largest cause for debt – living like the Jones’. Therefore set your plan, stick to your plan and put your blind fold on, enjoy the ride.

7. Get a professional finance coach.

There are several benefits of working with a professional finance coach: your coach offers a fresh perspective on your financial challenges, enhanced decision-making skills, increased confidence and a depth of financial expertise. For more information on working with a finance coach please visit: http://unlimitedexp.com/services/.

The Four A’s of Finances

There is a process to wealth for the non-wealthy and we look to expose this process in this article.

The first step is arranging. Arrange your financial picture that is readable and understandable. You might want to speak with a financial advisor or your tax professional that will work with you to prepare accurate personal financial statements.

The next step is assessing. Once the financial statements are prepared it is now time to assess your financial situation. How much debt are you carrying? What areas are your revenue coming from? What opportunities are there to produce more income or shrink your debt?

The third step is set an aim. After the assessment is done it is now time to create a plan and set a goal. When you set your goals, be sure to work backwards, yes backwards. Look at where you would like to be. Make that your long term goal, three to five years out. Determine the steps you will need to take from where you are now to where you want to be. These will be your mid range goals. What can you do right now (within the next 30 days) to move in that direction? These will be your short range goals.

The fourth step is to administer. Now that there is a plan in place, the plan must be executed. Life is full of obstacles therefore you will need to form a team of people to whom you will be accountable to with regard to administering your aim. It is important that you do something everyday to push you closer towards your aim. It is also important to select people on the accountability team who will be honest with you and those who are not jealous of your progress.

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