Robert Kiyosaki: 4 Budgeting Tips for 2024
Written by
Katie Wudel
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Spending money without giving it much thought can be easy when you don’t have a budget. However, this habit could hurt your finances.
Financial expert Robert Kiyosaki emphasizes the need for regular budgeting. His approach emphasizes a mindset shift from traditional budgeting to a wealth-building strategy. Here are four essential budgeting tips from Kiyosaki for 2024.
1. Treat a Budget Surplus as an Expense
Kiyosaki says a budget surplus should be viewed not as an asset, but as an expense. This means prioritizing charity, investing, and saving as essential budget items. Most people consider these activities only after all other expenses are covered. However, Kiyosaki’s approach is to make them a priority, embodying the principle of paying yourself first. This strategy is not about hoarding money but protecting yourself with a safety net, ideally saving about six months of living expenses.
2. Your Expense Column Is Your Financial Future
Kiyosaki highlights the importance of the expense column in your financial statement. It’s not only about listing your monthly expenses but also understanding that these choices shape your financial future.
Kiyosaki contrasts two different types of expense columns, one filled with investments and savings and the other with frivolous spending. This comparison underscores the impact of daily financial choices on long-term wealth accumulation.
3. Use Assets To Pay for Liabilities
Kiyosaki emphasizes the importance of understanding the difference between assets and liabilities. An asset is something that puts money in your pocket, such as dividends or rental income, while a liability takes money out.
The key is to acquire assets that generate enough income to cover your liabilities. This approach shifts the focus from cutting expenses to expanding income, aligning with Kiyosaki’s philosophy of expanding means rather than living below them.
4. Spend To Get Rich
Contrary to conventional wisdom, Kiyosaki suggests that spending, not saving, is the way to wealth. This doesn’t mean spending recklessly but strategically investing in assets, even during tough times. This approach requires a mindset that seeks to increase income and assets continuously, leading to financial freedom.
How To Start Budgeting
Start by assessing your income and expenses, then setting realistic financial goals. Choose a budgeting method, like the 50/30/20 rule, and allocate funds accordingly, using tools like apps or spreadsheets for tracking.
Next, regularly monitor and adjust your budget, focusing on building an emergency fund and reducing debt. Most experts recommend setting aside at least three to six months’ worth of expenses.
It’s also important to educate yourself about personal finance. However, don’t hesitate to seek professional advice if needed. Stay disciplined and patient, and make sure to review and celebrate your financial progress.
Bottom Line
Kiyosaki’s budgeting tips for 2024 revolve around a fundamental shift in how we view and manage our finances. By prioritizing savings and investments, understanding the true nature of assets and liabilities, and focusing on income expansion rather than expense reduction, individuals can set themselves on a path to financial freedom and wealth.
Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.
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