As work at home moms, one aspect of success that we have over most of those who work a nine to five job is our experience with properly handling our finances. Without a doubt, the best investment we can ever make is to take the time to truly understand just how our finances work. Too many people are much more interested in the next “get rich quick” scheme. Those same folks just spin their wheels trying to find a short-cut to real wealth.

I just finished reading the book shown in this post. It’s another book in the popular Rich Dad Poor Dad series by author Robert T. Kiyosaki. In a extremely readable fashion, the author develops his five key principles of financial intelligence. Kiyosaki provides real insights on these key steps to wealth:

• How to increase your money — how to assess what you’re really worth now, what your prospects are, and how to start mapping out your financial future.
• How to protect your money — for better or for worse, taxes are a way of life. Kiyosaki shows you that “it’s not what you make….it’s what you keep.”
• How to budget your money — everybody wants to live large, but you have to learn how to live within your budget. Kiyosaki shows you how you can.
• How to leverage your money — as you build your financial IQ, knowing how to put your money to work for you is a crucial step.
• How to improve your financial information — Kiyosaki shows you how to accelerate your wealth as you learn more and more.

To that, I add the following:

• Establish a full emergency savings account fund of at least 3 to 6 months of expenses to cover the financial anomalies that we cannot anticipate. If we do not have this emergency fund in place and a large unexpected expense comes up we could be forced to put it on a credit card, at an exorbitant interest rate.
• Prepare a personal budget. This is my most important recommendation. Unfortunately, most people don’t even make this the first step of starting their personal budget. You cannot hope to succeed with financial management if you do not first try to understand your monthly expenses.
• Never purchase a new, capital asset on credit. Articles like appliances, furniture, automobiles and boats reduce in value as soon as you purchase them, but the payments continue for the life of the loan. And, the value usually continues to decline long after the asset’s life has ceased. In addition, the cost of interest is also added to the total cost of the item. Rather than financing the purchase, save for those items by putting aside some funds each payday. Make do with what you have and plan for the future.