University of Wisconsin - Extension

Contact: Gayle Rose Martinez, 715-743-5121, gaylerose.martinez@ces.uwex.edu

Neillsville, Wis.--How does a person become wealthy? "Get rich quick" schemes flood the Internet and junk mail arrives daily promoting risky investments. Buying weekly lottery tickets fuels some people’s dreams of instant wealth.

For most people, the truth is that wealth comes a little bit at a time. Each day we make decisions that can move us toward wealth or debt.

"One way to view wealth is to think of it as owning more than you owe," says Gayle Rose Martinez, accredited financial counselor and Clark County family living educator with the University of Wisconsin-Extension. "A good tool to help you understand the power of your daily spending choices is to maintain a weekly spending plan. Start writing down what you must spend in the coming week. As the week goes by, keep track of what you actually spend, including bills you pay, so you can see results of your choices."

If you find you’ve run out of money before the end of the week, you’ll be able to see how small choices you made affected your cash flow. For example, when you were shopping, did you buy things you really didn’t need or stock up on unnecessary items because they were on sale?

If you have money left over at the end of the week, you have another choice to make. Do you need any of the money for the next week’s expenses? Can you save some for longer-term financial goals or expenditures? Or do you want to spend a portion on something you simply enjoy?

You may decide to allocate the remaining money for different things. For example, if you have $50 left over, you could put $10 in your emergency savings account, $20 towards the next week’s expenditures and $20 on something for fun.

You can use this same process when you receive a larger sum of money, such as a tax refund or the economic stimulus payment that the government will begin sending this month. People often spend this type of money before it arrives. Instead, you can view the extra money as an opportunity to pay down a debt. Or you can allocate 10% for a savings account. "Increasing savings is the best defense against increased debt," says Martinez.

Keep in mind that large lump sums of money such as tax rebates come along infrequently. What you do with one-time extra money is important, but it is the little choices you make each day that will move you toward wealth or debt--one choice at a time.

For more information on money management, contact your local UW-Extension county office.