We don't often pay enough attention to principles, but they are so valuable. As an Electrical Engineer, I appreciate the consistency that principles bring. Those fundamental truths create a foundation that allows you to develop new measures and analyze what’s currently taking place. I want to share with you some principles that have helped me change the financial trajectory of my life.
First, let's take a quick look at the definition of a principle. It’s simply a basic law or a fundamental truth. For those of you that are a lot like me, principles give us a logical way of looking at what's going on in our world so that we can quickly adapt and adjust as necessary. An understanding of financial principles provides true clarity of your financial situation. Once I gained an understanding of some financial principles, I was able to:
clear up $35,000 worth of debt that was left in the aftermath of my divorce.
get out of the 2-bedroom apartment and into my 3-bedroom townhouse.
start a business that continues to support me nearly 20 years later.
All of that was accomplished through the use of financial principles. So, here are a few that can support you.
Do you know what are you currently doing financially? Awareness with help you prepare what you need to build a firmer financial foundation. In season 1 Episode 29 of my Red Alert Dairies podcast, I share that every dollar needs a job. Make sure you assign a task to every dollar.
Taking action is essential. Too many times people just gather information. Don’t let this be another moment that you gain information. Take some action starting today. Over the next 30 days get a receipt for every purchase you make. Even if you spend a dollar on a pack of gum, get a receipt. It does 2 things. You will be able to quickly see what you are spending your money on and the receipts will naturally fall into categories like transportation, household needs, food, entertainment, and so on.
There are resources that already exist. You don't have to buy expensive products. There are simple budget templates that already exist on the internet that you can download. Use the templates that are already available for word and excel or numbers and pages. These platforms are already developed to support you.
Find someone to help you. There is always help somewhere that you can tap into. Now is the time to find it. If you could do it on your own, it would already be done. If you could do it on your own, it would already be done. Sometimes we don’t know what we don’t know.