Beyond Budgeting: Tips for Increasing Your Net Worth

Beyond budgeting goes one step beyond money management for your home or business to help you build your nest egg. Think of it as an accelerator for your PLAN account. Even if you only employ one of these strategies, you will build wealth more quickly than you imagined possible.

First of all, if you have taxes taken out of your paycheck and are receiving a large return every year, you may want to consider increasing the number of exemptions on your W-2. Some employers limit you in how many they will allow, so you might be stuck trying whatever their maximum is.

There is no reason that Uncle Sam should be able to use that money instead of you. Take the extra money in your paycheck every month and put it right into your Plan account. You may want to save a little bit of it to pay a few hundred dollars in taxes. Just open up a separate savings account for that purpose. You will be earning interest on money that the government would otherwise be borrowing--without paying you to use it!

If you are in debt, the extra money should go to paying it off quickly. As soon as you are out of the hole, you will be able to turn around and dump it into your Plan account. You will already be accustomed to not using that money as part of your budget.

The next step beyond budgeting is to consider finding a financial advisor for your investment needs. There are many good companies and individuals out there. You may want to interview several to see which one understands your tolerance for risk the best.

If you want to invest in the stock market but don't want a financial adviser, my advice is: Don't go it alone. Find an investment group to join. My personal favorites are the Motley Fool (you can get on their mailing list to see everything they have to offer) and Changewave Investing run by Tobin Smith. Also good to try are local investing groups. Some of them require an invitation to join, so you'll have to start asking around among your more connected friends if you are not already a part of one.

Another step beyond budgeting is to start a home-based business. This assumes, of course that getting a second job is not an option, which is the case for most people. Even if you have a traditional business, having a home based business adds another dimension to your income streams that may not otherwise be possible. For example, while your traditional business requires you to be available all of the time, a home based business allows you to have more time freedom, especially after you have been established for a while. Also, there are many additional tax deductions available for the home-based business owner.

The last step beyond budgeting is to continuously further your financial education. Taking courses in investing, real estate, wealth building, or retirement planning are lucrative investments in yourself that will pay huge returns.

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