As we commit to positive changes, we start to realize that managing our personal finances becomes easier and part of our everyday routine. However, as we plan our lifetime financial priorities, we need to keep a few things in mind:
- We are “first” during our lifetime of earnings, meaning that we put away something first, then tackle our bills and expenses. Whether you’re paid every week, every 2 weeks, once a month, or when we close a deal doesn’t matter. We often tackle bills first, then try to save something from the money that is left over. Usually there isn’t anything left over, so we never save. However, now we are saving first, and then anything left over can be used for spending or saving. 2. We can have more money by spending less and saving more. Don’t bank on future expectations, promises, or possibilities as available money to spend. 3. Many millionaires have shared stories about how they became so successful: hard work, always save, and LIVE BELOW YOUR MEANS! Make rules for your spending. For example, “we are only eating out once a week,” or “We won’t spend more than $10,000 on a car,” “We will save $400 per month”. Stick to your plan. Consider using personal affirmations to also reinforce good habits, such as “I’m on my way to a great retirement” or “I feel good about saving!” 5. Realize that every financial choice has a cost: “If I buy this expensive car, I need to work 6 years to pay it off,” or “By spending this much more, it means that I can’t make that extra payment on the house, or throw in extra money towards that college savings fund.” 6. When you arrive at the place that makes you feel happy and financially comfortable, STAY THERE! For many people, this is the place they want to be, so don’t keep stretching. 7. Finally, start saving as early as possible. The most effective financial planning tool is a BUDGET. Unless you know where you are spending your money, how much and where you can cut back, you can’t begin to form the foundation to personal financial success.
Putting our money to work through careful planning gives us greater control over our financial futures. Budgeting helps to create our spending plan, so that our money can work as hard as we do for it. It’s this plan that can allow us to fulfill life-long financial well being.