There is a lot of talk these days whether it’s really possible to go from zero to rich or whether it’s just a pipe dream.  But if you look at it objectively, everyone who is rich (unless they inherited it of course) pretty much started at zero and worked their way up.

So the truth is that, yes, it’s very possible to start with virtually no money and become wealthy – but it does take hard work.

The first step is to get your personal finances sorted out. If you have a good foundation set up for your money then you can use it to help build up your assets and your wealth over time.

You’ll find that most people who have a healthy budget, have taken steps to reduce any debt and have a good amount of savings are those that are likely to get rich over those that can’t balance a check book.

So how do you get your own finances in order?

The first step is to set up an emergency fund. You should have enough money in that fund to cover any unexpected expenses that you might have over the course of twelve months. Usually that’s around two thousand dollars for most people, although it varies according your lifestyle.

Once you have that set up you then need to start an easy to follow household budget that allocates money for your bills and expenses, spending money and of course savings. The simpler the budget the easier it will be to stick with which is why I like budget’s with just three sections: savings, expenses and spending.

The method I use is to pay into your savings (or paying down any unsecured debt if you have it) first before you do anything else.  Yes that means taking out that money BEFORE you pay any bills. A good amount is around 10% of your income but if you can manage more then it’s even better.

That way, once it’s taken out its done; you don’t have to think about it anymore. Then you can pay your bills and whatever is left over is yours to spend without feeling guilty.

By now you should have your emergency fund set up and are sticking to your budget, the next step is to pay any secured debt off that you might have.  Unsecured debt is things like credit cards, store cards, personal loans and so on. It doesn’t include your home loan which is secured debt (you could essentially pay the loan off by selling the asset).

Becoming debt free is a powerful feeling and once you’ve managed to pay it off you can start saving. And that saving is going to take you from zero to rich.

Tracey Edwards