3 simple ways to get a handle on your money and reach your financial goals

For many people, 2017 was a year of challenges, defeats and heart breaks. Whereas for others, it was a year of absolute triumphs, success and blessings. The fact is some of us experienced valuable lessons whereas other valuable victories. Regardless of your experience, it’s time to put a bow on 2017 and kiss it goodbye. Now is the time to start enacting your aspirations, plans and get a head start on reaching your financial, physical, spiritual, professional and social goals for 2018.

Okay, some point you might have heard that a goal without a written plan is just a wish. It’s not just useless words. A goal setting plan creates a bridge between today’s dream and tomorrow’s reality, without a plan of the what, when, why, how and who, goals alone will not get you to your destination. Once you have your goals start your plan today. The fact is only you, possibly with the help of a financial professional, can decide what your financial priorities should be for the new year.

The reality is everyone isn’t as focused, structured, organized or committed. Every year, many people have goals to lose weight, get a new job, pay off debts, go back to school or earn more money. However, within 3 weeks of the new year, most of those people give up on their goals. No matter what happen last year, it’s gone. There is nothing that can be done about it. It’s time that we focus on this year new year. Here are 3 simple action plans to help plan, focus, get a handle on your finances for 2018.

Get on a budget –
Here is an interesting fact, less than 3 out of 10 Americans have or live on a written budget. The number is much less for those whose earning is less than $50,000/year. It’s a serious problem because apparently people don’t seem to understand the magic of living on a budget. The rising cost of living (food, housing, healthcare, ect) are the more reasons why people must commit to living on a written budget.

Here are 5 powerful reasons why you should live on a budget:

  • A budget helps you gain control of your finances. Think of a budget as a financial road map. It will guide you to your destination
  • Budgeting helps you achieve goals. Whether it is putting money aside for emergencies, a vacation or a college education, a budget helps you devote resources to those things that you determine are most important
  • Budgeting helps improve habits. What you measure, you can improve. If you spend more than you earn, you will drain your savings. And, if it continues, you will take on debt
  • Budgeting helps you avoid debt and improve credit – a budget helps you identify ways to get out of debt and stay out of debt. By paying your bills on time and not taking on too much debt, you will take the most important step toward building good credit

Establish an emergency fund
Put some money away in the event of a personal financial dilemma, such as the loss of a job, a debilitating illness or a major expense. It is recommended that you set aside at least $1,000. However, 3 to 6 months of expenses should be your primary target, when it comes to establishing an emergency fund.

Here are 3 simple ways to find money for your emergency fund. Sell something – Look around the house, you’ll be amazed at how many items (old kids’ toys, exercise equipment, dusty power tools, etc.) Earn additional income – Commit/find additional income sources to supplement your primary income, even for a short period. Adjust your budget – Check your budget and do a bunch of little cuts that you won’t notice individually but add up significantly.

Commit to being debt-FREE
Personal debt is bad! It is necessary that you stay away from obtaining it. However, in the likely case that you’ve gotten into it (often time, too much of it), make the commitment to get rid of it in the shortest time possible. Evidently, it is easy to get into debt, however getting out of debt can be extremely hard and demanding.

Becoming debt-free is as much emotional and as it is scientific. Therefore, victories and accomplishments (even the small ones) need to be measurable and celebrated. That is one of many reasons why I support Dave Ramsey’s strategy of paying-off the smallest to largest debts (regardless of interest rates). Emotionally and psychologically, it is the right way to keep momentum going and maintain drives to be coming debt. I believe it is the most effective and impactful way to becoming debt-free.

Okay, one more thing, the ability to effectively manage our personal finances is an important skill everyone can develop and improve on. Contrary to popular beliefs, ignorance is NOT bliss when it comes to personal finance. What you don’t know can and will hurt you. As we roll out the red carpet for the new year, decide and commit that 2018 is the year you’re going to get a handle on your money. Start today, so tomorrow you can say “I DID IT”.

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