Finance upside down with reverse budgeting

Financial security and freedom is a goal many Americans seek. However, when most people receive their paycheck, bills come first and spending money comes second – rarely leaving any for savings. But these actions, which we may consider as being responsible, may be a faster track to the poorhouse than to riches.

Research shows that an early and stable savings account is the foundation for fortune. Many personal financiers support the idea of "reverse budgeting," which promotes paying yourself first – not your creditors.

"With reverse budgeting, the first payment should be to yourself," says Eric Solis, CEO of SAVE252. It’s easy to get started – just pick a goal to save for, such as retirement or a plasma TV, decide on an amount you can commit to for at least six months and deposit that money into your brokerage, mutual fund or retirement account. Do this even if you think can’t afford it. Then, pay your other bills as usual.

If you find that you do not have enough money to cover all the expenses, write down the amount you are short, and then find a way to raise the money. It may mean that you have to brew coffee at home, or take lunch to work a few days a week.

Ask yourself, "Is the pain of giving up my perks greater than the pain of being in financial bondage?" After just a couple months of breaking your old spending habits, you will be able to continue saving money every day and still live comfortably.

Certain programs can keep you focused and provide structure to your savings. SAVE252 is a company that can remove the guesswork from this revolutionary type of personal finance. By selecting the exact amount you’d like automatically transferred from your bank account into your account on each day the stock markets are open, you will be able to sleep comfortably knowing that your future finances continue to grow.

The amount that you contribute can be as little as one dollar a day and doesn’t lock you in. The program provides you with access to an automated account that allows you to change your settings to fit your current financial situation. Through this, you can increase the dollar amount that you want to save, or you can temporarily defer your contributions for any reason. You can even turn your account off for any reason by placing a stop date or make an additional, one-time contribution if more money becomes available.

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