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Living below your means can apply to all income levels.  Look at it this way: unless you know you're going to die within weeks (and who ever really does), you should be planning for your future.  Part of that planning might as well be setting aside at least 10% of your total income to create wealth.  This method takes time (years) so you must be patient; but, given enough time, it's a sure thing to make you wealthy.

Hopefully, the sensationalist-sounding start to this page hasn't scared off those of you that (like myself) are skeptical of such stuff.  The above two paragraphs are true, don't get me wrong; but there are definitely other benefits to living below your means.  They all come under the heading: gaining financial control of your life.  In our day-to-day lives, there are no true guarantees; so, if you hold life dear, anything you can do to improve your chances for a better life should be considered.

As hinted at above, once you are living below your means and building up a savings; there's the question of what to do with the money to create wealth.  Below is a table containing three possible accounts to put that savings into.  You will notice that each account has a percent annual return associated with it.  The returns are averages of what you may expect to get in todays marketplace.  The figure for Stock Mutual Funds (10%) is a figure that has proven to hold over the last 60 years or so (averaged); though there are no guarantees this will always be the case.  Still, for most people, a good Stock (Equity) Mutual Fund is usually the best vehicle for wealth accumulation.

If you can afford more than $100 per month in savings, a fairly good estimate of the future account balance can be found by using the above table.  Using $100 per month as the base, divide that into the amount you can afford, the result should be a number larger than one.  Take that number and multiply it by the figure in the box that corresponds to the type account and length of time you want.  As an example, say you can afford $300 per month in savings.  Dividing $100 into $300 gives you 3.0.  Now, say you want to invest it in a Stock Mutual Fund for 25 years; the figure corresponding with this choice in the above table is: $132,683.  Take this amount and multiply it by the 3.0 (in this case); the result is: $398,049.  Not bad, especially when you realize that your contributions ($300 per month) only add up to $90,000 after 25 years!  All the rest is earnings or growth or gravy or whatever the heck you want to call it.

Listed below are a few items that may help you make a savings plan a reality.  In other words, free up money for contribution to your savings in order to create wealth.  Should you have any additional suggestions for this list, I'd appreciate an Email message sent to the address displayed at the bottom of this page.

• Credit Cards - pay off any accumulated balance every month.  At about 18% interest, the credit companies are making from us almost twice what we can ever realistically hope to gain from the Stock Market.  You will never get ahead this way.  If you are carrying a hefty balance on any credit card accounts, make it top priority to get these paid off before worrying about any savings plan.

• Automatic Payments - a great way to have money transferred to investment (or savings) accounts on a regular monthly basis.  Using this technique, you won't have to remember to contribute to your savings plan every month.

• Create a Budget - to help you discover where, exactly, all the money is being spent.  Guidelines on setting up or improving a budget can be found on my Budget Basics page.

• Keep Track of Spending - write down in a small notebook or pad every time you spend money and what you spend it on.  Review the list weekly, did you really need to buy the things you did?

• Begin 401(k) or IRA account - a 401(k) plan, if available to you, is highly recommended.  An IRA, as your best second choice, should also be looked into.

A closely related subject to saving, frugality, is gaining in popularity; it can be considered the conservation of one's finances.  There are many good books and newsletters dealing with this subject.  To access some related files for download, visit my Books & Files page.  A Web site with a good selection on the subject is: The Frugal Corner - check it out.

If you have serious money problems requiring debt restructuring, bill consolidation or counseling to help change your bad spending habits to good; either of the below two organizations are possibilities for help.  Primarily, though, you will be better off working through your own debt problems - many have done so.  The benefits are invaluable and usually not learned by those that have someone do it for them.

• Consumer Credit Counseling Services:
  a nonprofit nation wide organization.  You will probably find their closest location in your phone book, or call them at 1-800-493-2222.

• Debt Counselors of America:
  an online organization, also nonprofit, with much to offer.