The concerns of the economic disaster and the 2012 Presidential Election have many people contemplating the status of their finances. As Americans watch the volatility of stock returns, most wonder about the control they have attaining a secure financial future.
During 2008, many investors and savers were affected by the beginning of a market crash. If anything, numerous individuals and businesses learned from the behavior each possessed and declared to make plans to change their financial behavior whether it’s diversification, consistency, or specifying short and long term goals; something needed to change.
As you embark on a new year you must have a new attitude toward your finances, relationships, outlook, and you. The success of tomorrow begins with the change of today.A New Year often begins with a plethora of New Year’s resolutions. In the top three on the list of many individual’s goals is getting their personal finances in order. Planning for and maintaining your financial future may not be exciting but it is much needed and has the possibilities to reap enormous benefits.
Since New Year’s resolutions have a tendency to be forgotten by the end of January, it’s important to look at your resolutions as goals. Goals are a continual change that is visited daily and adjusted as needed. Goals forces individuals to become flexible when attempting to accomplish. While creating your goal of improving your personal finances for 2013, it’s vital that you also create ways to accomplish it.
Clarify your financial goals. In order to get what you want out of your finances you must know exactly what you want. Too often, individuals state broad goals which permits them to lose track of what their seeking to accomplish. In order to achieve your financial goals, keep it simple and sweet. List one long term and two short term goals you want to achieve. Make sure the goals state a clear purpose, what action you’re willing to perform and when you want the goal to expire. For example, instead of saying, “I want to be debt free this year” you would say, “I will pay off four credit credits totaling $2500 by Oct. 2013 by paying $125 each pay.”
Create a realistic budget. A budget is a plan that navigates you toward financial success. Without a budget you spend more than what your paycheck allows. If you aren’t willing to travel to an unknown destination without a roadmap, you shouldn’t attempt to accomplish your financial goals without a budget. A budget should include realistic and honest numbers. Each month, take the time to create a budget that will guide you. A budget should include every expense in your household from a mortgage payment to savings/retirement and date night. Remember, if money leaves your household for whatever reason it is an expense and must be indicated on your budget sheet. If you don’t have enough money to pay your bills, it’s time to cut expenses.
Track your spending. Many individuals believe they aren’t able to stretch their paycheck because they don’t receive enough money to last until the following pay. This is a false reality by many, but if you track your spending you will find that you have more money than you realize. Track your spending for 30 days by saving all your receipts, write down the dollar amount, location and why you purchased the item. You will find that you are splurging money outside the monthly budget while engaging in emotional spending. Keep in mind, a budget should include all expenses. Therefore, if you plan to have a lunch date or visit the vending machine three times per week you must indicate in the budget. Again, tracking your spending will allow you to notice how much money you are spending, where and why.
Stick to it. Once you establish a clear financial goal, create a plan and budget, you must hold yourself accountable to accomplish the task. Accountability promotes success; otherwise your goals are simply words on a sheet of paper. In order to stick with your goals you must put them in plain sight so that you’re able to visit each one day by day, perform a daily duty to accomplish and note your success each week.
Whether you decide to eradicate your debt, build an emergency fund or increase your retirement contributions, implementing these strategies will allow confidence and financial growth. Each person has the power and ability to improve their current situation. If you aren’t willing to change your behavior you will never be able to change the results. Now is the time to create a financial plan for 2013.