How to take Control of Your Money and Start Building Wealth

So you want to take control of your money and build wealth...

My name is Thomas, I want to welcome you to Wealth for the Win. I wanted to start this website to help educate as many people as I can on money, finance, and wealth. The main objective of Wealth For The Win is to give you the tools to control your money instead of your money controlling you. In order to build wealth we must first start with a solid foundation on which we will build.

Step 1: Where do you stand with your money?

Where to Start

The first step on the journey to building wealth is determining where you have been so far. You need

to know where you are in order to know where you are going. Creating a personal balance sheet will give you the exact location of where you stand with your money. Your personal balance sheet will give your personal net worth and let you know exactly where you stand. The balance sheet calculates your net worth by taking all of your assets(items you own) and subtracting all of your liabilities(debts you owe).

Get started by gathering up all of your financial information you have available to you. Gather all of your most recent statements or log onto you bank, investment/brokerage, retirement, credit card, student loan, mortgage, auto loan, personal loans, etc. Get your current balances for every asset you own and the principal balance that you owe on any loans you have.

Assets

Start your balance sheet with the Asset column. List all of your assets with the current balances and estimated values of other tangible assets (car, resale of jewelry, house, etc.)

  • Cash: (Checking, Savings, Money Market Accounts, CDs, Cash Under the Mattress)
  • Investments: (brokerage accounts, 401k, IRAs, College Savings)
  • Home Value: (Estimated Current Resale - Zillow.com)
  • Automobile Value: (Estimated Value - Kellybluebook.com)
  • Personal Valuables: (Jewelry, Art, High Value Household Items, Sports Memoribilia )
  • Other: (Personal Business, Loans to Family/Friends, Etc.)

Liabilities

Next fill out the liabilities column of your balance Sheet. List all of your liabilities with the current principal balances and estimated interest accumulated.

  • Credit Cards
  • Student Loans
  • Auto Loan
  • Mortgage
  • 401k Loans
  • Other: (Business loans, Loans from Family/Friends, Etc.)

Net Worth

Now take the difference between your assets and your liabilities. Now that you have calculated your net worth you will have a starting point. This starting point will allow you to know where you stand currently so that you can set goals for where you are going. Building wealth is all about increasing your net worth. Net worth will go up by increasing your assets while decreasing liabilities. As your start winning with wealth you will want to keep track of your balance sheet. Be sure to update you balance sheet every month to see how you are doing.

Net Worth Spreadsheet

Below is a simple net worth calculating worksheet. If you have any questions please feel free to contact me.
[embeddoc url="http://www.wealthforthewin.com/wp-content/uploads/2016/03/Balance-Sheet.xlsx" width="100%" height="500px" download="all" viewer="microsoft"]

Step #2: Tell your money what to do, Get a Budget!

“If you don’t know where you are going, you might wind up someplace else.” - Yogi Berra

Budgets are frustrating to make and take persistent

effort to stick with. Everyone that has an income and bills attempts to keep a budget, budgets are a necessity. Either you keep a budget in your head, written down, in a spreadsheet, or an App. If you are keeping your budget in your head how successful are you at sticking to your budget? If you were like me it was an epic failure and you continuously over spend and under earned each month. This failure didn't appear at first but after years the debt piled up and the problem became apparent. Sound familiar? I denied my failure too. For years.

Budgeting in your head doesn't work. Thankfully technology has advanced and Real-Time budgeting and tracking of our budget is possible. Apps like Mint, Personal Capital, and Everydollar you can build your budget every month and track where you are every day, hour, minute, second... You get the idea.

Start Your Budget Now!

Where to Start with your budget? Pull out a sheet of paper and lets begin. The best place to start with you budget is to start with your Income. On the top of the paper write down "My Budget" and bleow that write down you monthly take home income(after taxes & withholding). Put a line under the income and we will start our budget categories.

Budget Categories

The main categories for the budget will consists of life's necessities, Budget Lighthouseyour needs to produce income, debts, and lastly wants. It is important to start your budget with the basic needs of life. Number one is to have a roof over your head and the utilities to keep warm or cool if you are in the south. Have electricity to keep the lights on and running water to cook and stay clean. Along with the shelter you will need food to keep up your energy and insurance to keep you out of financial disaster. Take it from
me, getting into a position where you need insurance and don't have it will devastate you financially. After your basic needs are taken care of you will want to ensure that you allocate the appropriate amount to your needs to produce an income. Transportation, clothing, and grooming all fall under this set of needs and should be maintained to support your income. After ensuring you protect your income you need to pay your personal debts. Before you can play you have to fullfill your obligation to the people you owe money to. You borrowed the money, you must now pay it back, and pay it back FAST! The faster the better. The more you can put towards paying back your bad debt the faster you can start building wealth and living the live that you truly deserve. Last but not least you can use the rest of your budget for your wants.
Life's Necessities

  • Saving(cash is key to building wealth)
  • Shelter(rent and mortgage)
  • Utilities(heat, water, gas, electricity)
  • Food(groceries, lunch at work, snacks)
  • Insurance(medical, auto, life, renters, home, etc)

Needs to Produce Income

  • Transportation(lease, auto loan, gas, maintenance, inspection/registration, etc.)
  • Clothing(dry cleaning, replacement clothes, etc.)
  • Grooming(hair, nails, shaving, etc.)

Debts

  • Credit Cards
  • Student Loans
  • Personal Loans

Wants

  • Personal Spending
  • Recreation & Entertainment
  • Toys

Simple Budget Spreadsheet

Below is a simple Budgeting (Monthly Cash flow) worksheet. If you have any questions please feel free to contact me.
[embeddoc url="http://www.wealthforthewin.com/wp-content/uploads/2016/03/Budget.xlsx" download="all" viewer="microsoft"]

Step #3: What are Your goals for Your money?

FreedomWinning at life requires that we have goals. We all have dreams and that is great but we should focus on our goals. Our Goals are Dreams with Deadlines. We all have dreams about how we want the things in our lives such as our physical well being, our intellect, our career, our social life, our family, our finances, and our spirituality. We need to take these dreams and turn them into goals and take these goals and turn them into reality!

Goals Have 5 Elements

  • Must Be Specific
  • Must Be Measurable
  • Must Be YOUR Goals
  • Must Have a Time Limit
  • Must Be Written Down