Financial competency is not something that comes naturally to everyone, and it is easy to fall into bad money habits that can be hard to break. Every so often, the realization that something needs to change may hit, but the change never comes. But if you are serious this go-round, and actually ready to make some headway, here are a few tips to do just that.
Take Stock
This is going to be uncomfortable and for that reason, you’re not going to want to do it. It is easy to go into denial about our true financial situation. We may know things aren’t great, but as long as we don’t get mired down in specifics, we can keep trudging along, thinking things aren’t that bad or that we don’t need to really make any changes to our habits, lifestyle,etc..
But the time has come to face the financial music. What are all your expenses? How much money are you bringing home every month? How much debt do you have? How much do you have in retirement savings? Have you set any sort of financial goals and how well are you making progress towards them?
Where do things need tweaking? If you feel a bit overwhelmed, or want to develop a plan of attack, you might consider making an appointment with a financial advisor.
Money Blind Spots
It is common to have our own specific blend of money weak spots. Identifying yours is key to making real change because instead of making general declarations about ‘being better with your money’ you can outline some concrete steps to improve your financial situation and handling of money.
Do you keep dipping into savings for frivolous purchases? Do you tend to charge up your credit card to get points or other rewards, vowing to pay off the balances, but they just keep increasing as you use the money for something else? Do you have a tendency to live beyond your means? Are you prone to indulging in retail therapy a bit too much? Are your weekends out a bit too extravagant? Again, may not be comfortable to to this, but it will help you really make effective change.
One Day at a Time
When you tell your mind you will be doing or not doing something forever more, especially when it is something you may not be so keen on doing in the first place, it freaks out and rebels. It just can’t imagine that, and the urges to keep things the same take over. Don’t go overboard with austerity, unless absolutely necessary…it won’t last. Don’t make bold declarations that you will never carry a balance on your credit cards again, or eat out more than once a week. Just focus on each day and making smarter choices and it becomes second nature. It might help to focus in on one or two goals to start, and really put yourself into those, while being mindful of other issues of course.