Sign up

Financial Education Blog

Blog Author
Blog Month
4 Tips on Budgeting to Become Rich

4 Tips on Budgeting to Become Rich

How the rich budget to get richer

Poor dad said, “Live below your means.”

Rich dad said, “Expand your means.”

If you were to take a look at the difference between my poor dad’s budget and my rich dad’s budget, you’d understand the vast difference of mindset between the two statements above.

My poor dad’s budget focused on cutting expenses to meet his income. It was important for him to pay everyone else and then enjoy what was left—if anything.

My rich dad’s budget focused on increasing income. It was important for him to pay himself first and then taking care of his expenses. He said, “Most people use their budget as a plan to become poor or middle class rather than become rich. My budget is a plan to become rich.”

Here are four tips my rich dad taught me about budgeting to become rich.

#1 – A budget surplus is an expense.

One of rich dad’s most important lessons was, “You have to make a surplus an expense.”

What he meant is that most people view a surplus as an asset. They place their extra cash in the bank or they spend it on liabilities. Rather than view extra money as an asset, rich dad viewed it as an expense in the form of charity, investing and saving.

Most people want to give to charity, invest in assets and save money, but the problem is that they view it as something to do after they’ve paid their expenses. By making these things expenses in his budget, my rich dad ensured that he would make them a priority. He called it paying himself first.

#2 – Your expense column is a crystal ball.

If you want to predict a person’s financial future, you have to look no further than the expense column.

Here’s an example of two different expense columns:

Person A: Person B:
Donation to charity Six-pack of beer
Savings New shoes
Books on investing New TV
Seminar on real estate Football tickets
Gym dues (Another) six-pack of beer
Personal coach Bag of potato chips

While that’s a humorous example, it’s not far from the truth. When you look at most people’s expense columns, they’re littered with payments to other people and for liabilities. In each case, expenses don’t go towards anything that will make money and only things that permanently take money out of your pocket.

Take a look at your expense column. What does it say about you?

#3 – Use assets to pay for liabilities.

My poor dad was frugal and thought that was a virtue. If he wanted a luxury item, he’d simply deny himself that item. He said, “We can’t afford it.”

My rich dad loved luxury and if he wanted a nice toy, he’d find a way to buy it. He wasn’t reckless with his money. Rather he was smart in how he made it work for him and used his financial education. He asked, “How can we afford it?”

By increasing his assets, which increased his monthly cash flow, my rich dad used this money to purchase his luxury items and liabilities. If he wanted a nice car, he’d invest money until the asset produced the cash flow required to purchase that car. Then he had a nice car and a great asset.

Kim and I have used this philosophy over and over in our life to buy things we enjoy and build our wealth in the process.

#4 – Spend to get rich.

Being able to execute on the first three tips on budgeting means building a mindset that says when the going gets tough the tough get going. Most people stop spending on charity, investing and saving when times get tough. The rich, however, figure out ways to make more money by spending more money on assets, even when times are tough.

By pushing through those hard times, you develop a mentality that will enable you to make more money no matter what the circumstances. And that will make you richer than you ever imagined.

How can you afford the things you want in life?

To help you reach your goals, check out our free, financial education community here.

Leave A Comment jump to leave a comment
zhou
6/29/2012 2:04:24 AM
il ya beaucoup de points de lancel soldes vente Lancel sac en ligne qui donnent de qualité supérieure ayant contrefait somme économique. Fournisseurs de Lancel Bogus ont tendance à être fiables opposition au concepteur lancel artificielle sac. Luxurynavi est certainement un grand magasin de sac lancel isabelle adjani Evelyne-offre tous les types oflancel pour vous en ligne, en particulier recommandé de autres marques Lancel sac. Mesdames sont fous de sacs Si vous voulez garder le même rythme avec la tendance. sacs Lancel pourrait être votre meilleur choix.Beaucoup d'entre nous déclarent souvent se sac lancel premier flirt expliquer les rapports, néanmoins il peut être parfaitement clair ce fait vraiment fait. Par conséquent l'expérience de chacun de nos février l'histoire de partage cinquième nuit avec avec l'expliquer à votre histoire dans la jeune fille qui a maintenu cette petite Kelly spécifique. Précisément ce que la sacs lancel adjani jeune fille ne se ressemblent, où a fini par être la fille par l'intermédiaire. le fait que votre maman était ex semblable à Coloriage votre photo (et baver dans le sacs Lancel lui-même). Outre les sac premier flirt hauts talons, sacs Lancel est également acheter pour les femmes, a presque toutes les femmes d'au moins onesacs Lancel month.If tout ce que vous voulez savoir le goût des femmes, s'il vous plaît jeter un oeil à son Lancel, comme si vous voulez savoir sur l'homme, vous pouvez le voir, ce qui montre que la marque n `t wears.It doute ce lancel adjani rouge encore sur le statut du goût Women` s, il ya `est vraiment important Choisissez un sacs Lancel morose. Ici, je recommande vente privée lancel Outlet Pour les amis qui ont déjà croyaient avoir des haviving influence sur une Bentley. http://fr.exclancel.com/
Abhishek
6/19/2012 11:41:57 PM
And a firm mindset is required for this.
Said
6/20/2012 7:23:21 AM
Good
france
6/20/2012 8:52:10 AM
Such a nice advice Robert.
Jackson
6/20/2012 9:05:49 AM
Thanks Robert...you've opened my eyes with regard to budgeting. Great advice.
Hugo
6/20/2012 7:15:40 PM
19 years old and reading this, Thanks to Robert I can carry my family into a world of wealth they never imagined, but it was all i would dream. thank you
dfg
6/21/2012 12:53:35 AM
Michael kors is a top luxurious brand, which especially enjoys a great fame with the michael kors watch . The michael kors watches are hot all over the world market. A michael kors gold watch or a michael kors chronograph is very necessary for people who want to show their outstanding personality or who would like accurate time to make best use of their life. You can find all styles of watches by michael kors with best discount price and reliable quality in our michael kors outlet . Michael kors on sale allows you to get the best sale michael kors with less money. Choose your michael watches here today, you can the most outstanding one. http://www.michaelkorswatch.net/
dfg
6/21/2012 12:56:30 AM
Michael kors is a top luxurious brand, which especially enjoys a great fame with the michael kors watch . The michael kors watches are hot all over the world market. A michael kors gold watch or a michael kors chronograph is very necessary for people who want to show their outstanding personality or who would like accurate time to make best use of their life. You can find all styles of watches by michael kors with best discount price and reliable quality in our michael kors outlet . Michael kors on sale allows you to get the best sale michael kors with less money. Choose your michael watches here today, you can the most outstanding one. http://www.michaelkorswatch.net/
理可
6/21/2012 6:38:22 AM
good
xiao
6/21/2012 9:00:09 PM
Leisure and sports supra shoes on sale are an important part of fashion, as part of the clothing must be consistent with the trend of the times. Casual shoes can show the wearer's mind, and publicity of the wearer's aesthetics and philosophy of life is a reflection of personal taste and cultural qualities. A completely different style to the blue-collar force to the middle class from the IT sector, casual sports Supra Pilot Shoes big prevalent, it gives a symbol of vitality, and its assertive personality reflects the end of the century middle-class lifestyle that bring people to a classical nostalgia , but also with a youthful vigor to conquer all the petty bourgeoisie has become a symbol of their quality of life, reflecting their spiritual value orientation. Luxury is the kind of style, leisure is also a style. Casual sports supra shoes outlet combination of casual style and minimalist style, vigor, and passionate inner style and function of the casual sports shoes, strong, dynamic tempo highlights an independent and confident style. Throughout the development of popular rule in recent years, 2012 New Supra TK Society, casual sports Kids Supra Shoes in the spring and summer of 2009 will show the following trends of New Supra Shoes.we think you may love our Supra Henry Shoes well.so welcome you to buy Supra Vaider Shoes in our site we will shipping you Supra TK Society Shoes all free,in here you can enjoy best Supra Skytop Shoes and Supra Skytop II Shoes we allso will send you a little gift of Justin Bieber Supra Shoes.so welcome to buy shoes in our site. erewr
伟凯
6/22/2012 5:00:25 AM
POWER!
Team Honeywell
6/22/2012 5:06:12 AM
Thanks Robert. I am trying to follow the budget rules as best as I can. Thanks to your leadership and teachings I am now in a much better financial situation than I was a year ago. Thanks again Robert, Kim & Team
Alexsei
6/22/2012 6:24:48 AM
Спасибо огромное! очень рад читать ваши книги!!!
RAMON
6/24/2012 5:30:33 PM
exelente enseñansas gracias!!!!
alice
7/2/2012 8:46:22 PM
Love the BLOG, Vanessa! I've always admired our Gramma Boytar because she certainly lived in the balcony. I remember when Zoe was born and in writing her a letter, I was trying to describe what Gramma Boytar was like, and I penned that she lived in a way that she woke up each day asking the world around her, "How can I help you?" It was in that moment, something clicked inside me that I, too, want to live that way, serving, supporting, encouLove the BLOG, Vanessa! I've always admired our Gramma Boytar because she certainly lived in the balcony. I remember when Zoe was born and in writing her a letter, I was trying to describe what Gramma Boytar was like, and I penned that she lived in a way that she woke up each day asking the world around her, "How can I help you?" It was in that moment, something clicked inside me that I, too, want to live that way, serving, supporting, encouraging, etc. It was years later that I also realized, it was her prayer life that kLove the BLOG, Vanessa! I've always admired our Gramma Boytar because she certainly lived in the balcony. I remember when Zoe was born and in writing her a letter, I was trying to describe what Gramma Boytar was like, and I penned that she lived in a way that she woke up each day asking the world around her, "How can I help you?" It was in that moment, something clicked inside me that I, too, want to live that way, serving, supporting, encouraging, etc. It was years later that I also realized, it was her prayer life that kept her giving life to those around her. She wa[url=http://www.cheapreplicaukshop.com/][b]Christian Louboutin Replica[/b][/url] [url=http://www.cheapreplicaukshop.com/][b]Christian Louboutin Cheap[/b][/url] [url=http://www.cheapreplicaukshop.com/][b]Christian Louboutin UK Cheap[/b][/url] [url=http://www.cheapreplicaukshop.com/christian-louboutin-daffodile-c-1.html][b]Christian Louboutin Daffodile[/b][/url] [url=http://www.cheapreplicaukshop.com/christian-louboutin-spiked-c-7.html][b]Christian Louboutin Spiked[/b][/url] [url=http://www.cheapreplicaukshop.com/mens-christian-louboutin-c-8.html][b]Mens Christian Louboutin[/b][/url] [url=http://www.cheapreplicaukshop.com/christian-louboutin-daffodile-aurora-boreale-160mm-pumps-p-1.html][b]Christian Louboutin Daffodile Aurora Boreale 160mm Pumps[/b][/url] [url=http://www.cheapreplicaheels.com/christian-louboutin-spiked-c-2.html][b]Christian Louboutin Spiked[/b][/url] [url=http://www.cheapreplicaheels.com/][b]Christian Louboutin Knockoffs[/b][/url] [url=http://www.cheapreplicaheels.com/mens-christian-louboutin-c-1.html][b]Mens Christian Louboutin[/b][/url] [url=http://www.cheapreplicaheels.com/christian-louboutin-daffodile-c-3.html][b]Christian Louboutin Daffodile[/b][/url] [url=http://www.cheapreplicaheels.com/][b]Christian Louboutin Replica[/b][/url] [url=http://www.cheapreplicaheels.com/][b]Christian Louboutin Replica Cheap[/b][/url] [url=http://www.cheapdressesreplica.com/][b]Herve Leger Dresses[/b][/url] [url=http://www.cheapdressesreplica.com/][b]Herve Leger Replica[/b][/url] [url=http://www.cheapdressesreplica.com/][b]Replica Herve Leger Dresses[/b][/url] [url=http://www.cheapdressesreplica.com/][b]Replica Herve Leger Bandage Dresses[/b][/url] [url=http://www.cheapdressesreplica.com/herve-leger-strap-bandage-c-6.html][b]Herve Leger Bandage Dresses[/b][/url] [url=http://www.cheapdressesreplica.com/herve-leger-skirts-c-4.html][b]Herve Leger Skirts Replica[/b][/url] [url=http://www.cheapdressesreplica.com/oneshoulder-bandage-c-9.html][b]Herve Leger One Shoulder Bandage Dress[/b][/url] [url=http://www.cheaplorenzireplica.com/][b]Gianmarco Lorenzi Swarovski Crystal Shoes[/b][/url] [url=http://www.cheaplorenzireplica.com/][b]Gianmarco Lorenzi Cheap Replica[/b][/url] [url=http://www.cheaplorenzireplica.com/][b]Gianmarco Lorenzi Knockoffs[/b][/url] [url=http://www.cheaplorenzireplica.com/][b]Scarpe Gianmarco Lorenzi Replica[/b][/url] [url=http://www.cheaplorenzireplica.com/][b]Gianmarco Lorenzi Heels[/b][/url] [url=http://www.cheaplorenzireplica.com/][b]Gianmarco Lorenzi Swarovski[/b][/url] [url=http://www.cheaplorenzireplica.com/][b]Gianmarco Lorenzi Crystal[/b][/url] [url=http://www.cheaplorenzireplica.com/][b]Gianmarco Lorenzi Shoes[/b][/url] [url=http://www.cheaplorenzireplica.com/][b]Gianmarco Lorenzi Replica[/b][/url] [url=http://www.cheaplorenzireplica.com/][b]Scarpe Gianmarco Lorenzi[/b][/url] [url=http://www.bijouxonlineshop.com/][b]Bijoux Frey Wille[/b][/url], [url=http://www.bijouxonlineshop.com/][b]Frey Wille Jewelry[/b][/url], [url=http://www.bijouxonlineshop.com/][b]Frey Wille Online[/b][/url], [url=http://www.bijouxonlineshop.com/][b]Frey Wille Shop[/b][/url], [url=http://www.bijouxonlineshop.com/][b]Frey Wille Replica[/b][/url] [url=http://www.alexanderwang2u.com/alexander-wang-bag-c-2.html][b]Alexander Wang Bag[/b][/url] | [url=http://www.alexanderwang2u.com/alexander-wang-shoes-c-1.html][b]Alexander Wang Shoes[/b][/url] | [url=http://www.alexanderwang2u.com/][b]Alexander Wang Rocco[/b][/url] [url=http://www.alexanderwang2u.com/alexander-wang-frankie-creeper-combat-style-low-boots-p-1.html][b]Alexander Wang Frankie Creeper[/b][/url] [url=http://www.discountheelssale.com/][b]Christian Louboutin Heels[/b][/url] [url=http://www.discountheelssale.com/alexander-wang-shoes-c-25.html][b]Alexander Wang Shoes[/b][/url] [url=http://www.discountheelssale.com/christian-louboutin-pumps-c-6.html][b]Christian Louboutin Pumps[/b][/url] [url=http://www.discountheelssale.com/christian-louboutin-altadama-140mm-peep-toe-pumps-black-p-1866.html][b]Christian Louboutin Black[/b][/url] [url=http://www.discountheelssale.com/manolo-blahnik-jeweled-satin-dorsay-silver-sandals-p-52.html][b]Manolo Blahnik Wedding Shoes[/b][/url] [url=http://www.discountheelssale.com/manolo-blahnik-something-blue-satin-bridal-wedding-shoes-p-1364.html][b]Manolo Blahnik Something Blue Satin Bridal Wedding Shoes[/b][/url] [url=http://www.discountheelssale.com/herve-leger-dress-c-49.html][b]Herve Leger Dress[/b][/url] [url=http://www.discountheelssale.com/gianmarco-lorenzi-shoes-c-55.html][b]Gianmarco Lorenzi Shoes[/b][/url] sn't perfect but she certainly was an example to us!ept her giving life to those around her. She wasn't perfect but she certainly was an example to us!raging, etc. It was years later that I also realized, it was her prayer life that kept her giving life to those around her. She wasn't perfect but she certainly was an example to us!
Daniel
7/3/2012 11:16:18 PM
Ready for Financial Freedom? http://www.ctsfreedomandwealth.com/
Daniel
7/3/2012 11:17:10 PM
Ready for Financial Freedom? http://www.ctsfreedomandwealth.com/
saeon
7/4/2012 1:02:43 AM
http://www.cheapdreheadphonessale.com Cheap dre headphone are made of hi-tech materials and aiming at protect your ears. Beats by Dre are universally acknowledged excellent monster beats. As we all know, music makes people's life more colorful. No matter on the bus, in the surpermaket or in the coffee house, we can always hear the wonderful music. People's life will be tasteless without music. If you like listening to the music, you can't miss such a good chance. The high quality with attractive appearance of Heartbeats By Lady Gaga will make you fall in love with them. There are a series of beats by dre studio, including Heartbeats By Lady Gaga,Monster Beats Diamond, Monster Beats Ferrari, Monster Beats Graffiti, Monster Beats Monster Beats Justin Bieber, Monster Beats Kobe Bryant ,Monster Beats Lamborghini, Monster Beats LeBron James, Monster Beats Michael Jackson, etc. Welcome to choose one to enjoy the wonderful music and make your life more colorful.
moon
7/17/2013 12:17:51 AM
http://www.monsteriheadphones.com/ monster beats outlet online beats by dre prohttp://www.mkfactoryoutlet.com/ michael kors factory outlet michael kors outlet onlinehttp://www.cofactoryonline.com/ coach outlet online coach outlethttp://www.coshopfactory.com/ coachfactory.com/shop coach outlet usahttp://www.mcoachoutlet.com/ coach outlet usa coach outlet online usahttp://www.cmichaelkorsoutlet.com/ micheal kors outlet usa micheal kors outlet onlinehttp://www.mk-michaelkoroutlett.net/ michael kors outlet usahttp://www.shopcoachbagsfactory.com/ shop.coachfactory.com shop.coachfactory.comhttp://www.usacowy.com/ coach outlet coach outlet online
coach1
10/25/2012 12:05:40 AM
http://www.gotocoachsoutlet.org/ coach outlet http://www.louisvuittononlineshope.com/ louis vuitton http://www.coachoutletonlinepicks.com/ coach outlet online http://www.louisvuittonpursesbag.net/ louis vuitton handbags http://www.discountcoach-handbags.org/ coach handbags outlet http://www.cheapcoachsbagsusa.com/ cheap coach purses http://www.buycoachsoutletonline.org/ http://www.buycoachsoutletonline.org http://www.greatlouissvuittonbags.org/ louis vuitton purses http://www.coachpursesoutletss.org/ coach purses outlet http://www.coachfactoryoutletq.org/ coach factory outlet
zhenglulin
11/15/2012 1:00:13 AM
Coach Factory Outlet Coach Factory Louis Vuitton Louis Vuitton UK Louis Vuitton Outlet
zhenglulin
11/15/2012 1:04:21 AM
http://www.coachfactoryoutletallsale.com Coach Factory Outlet http://www.louisvuittonmall.co.uk Louis Vuitton Outlet
0

Play CASHFLOW Classic

Latest Rich Dad Blog Posts