Everyone wants to be smarter with their money. It is one of the most common New Year’s resolutions, and (just like exercise and weight loss) is often abandoned in no time flat.
While there is no true outline of exactly how you can succeed at spending less and saving more of your hard-earned money, here are four great steps that you can follow to get yourself in a financially responsible mindset:
Financial Success – 4 Steps:
1. Figure out your true goals.
Many money goals are very general. While a general goal is a good place to start, it’s important to sit down and take the time to iron out your financial desires. Instead of just saying “I want to save more of my money,” specify what it is you’re saving for, and quantify your goal with a number or percentage. For example:
- “I should put 5% of my take-home pay into a retirement fund every month.”
- “I want to save $3,000 for a vacation in two years.”
- “I need to save $100 every month for my children’s college fund.”
- “I ought to have nine months to one year’s living expenses in my emergency fund within the next five years.”
When you have a clearly defined goal, your next steps in the process will be easy.
2. Compare your goals to your lifestyle.
Now that you have a clearly defined goal, it’s time to evaluate what sort of lifestyle changes you need to make in order to achieve it. Take, for example, the vacation goal from above. If you want to sake three thousand dollars in two years, you need to save approximately $175 a month. Take a look at your normal monthly spending and find a few places where you could cut back your spending.
3. Take baby steps toward change.
One of the biggest mistakes that people make when working toward a goal is making too many changes too quickly. Instead of going cold turkey, make changes gradually.
Instead of fully cutting out your daily premium coffee, limit yourself to a few visits a week to your local barista. As you familiarize yourself with the taste of a home brew, make your caffeine runs less and less frequent over time.
The same principal goes for all money saving habits that you want to implement, including:
- Eating out less
- Quitting smoking
- Spending less on shopping trips
- Paring down your entertainment budget
- Using more coupons
As you slowly develop these money saving habits, you will see yourself come closer and closer to achieving your financial goals!
4. Celebrate your progress!
As with any achievement, it is important that you give yourself a pat on the back once in a while. The sacrifices made in order to become financially responsible aren’t easy, but they will allow you to be more successful in the future.
Reinforce your good financial behavior by celebrating your accomplishments. Share your victories with friends or family, or allow yourself to splurge a bit when you attain your goal.
Also remember – these four steps will help achieve small goals. Sometimes, though, professional assistance is necessary. If you need some more help with your financial planning, please call 877-550-0025 to speak to a professional financial advisor for extra help with estate planning, annuities and stocks, and much more.
