Successful habits to carry you through the year
It’s that time again – reflecting on the past year and feeling determined to make positive changes – especially in the personal finance department.
Let’s do it! As Tony Robbins says “The past does not equal the future”. So what if your past New Year’s resolutions fizzled out by February. Let that go. Don’t waste any more energy or time on self-blame, excuses or stories from the past. Move forward.
Many times lack of success is really due to lack of proper planning and/or lack of having the most effective tools. If you were going to take a cross-country road trip would your goal be to “drive across the country” and then get in your car and take off? Okay, for those spontaneous adventurous types, yes, they would just take off. Others would start planning ahead. What do they want to see or do on the way? What route will they take? How much time will they need? How much will it cost? Next, they would start utilizing tools like the Internet, travel agencies, books, maps and the recommendations of friends to help them finalize their plans and guarantee a successful and satisfying trip. In this high tech era there are enough tools and resources to solve practically any problem - including getting on top of your finances!
Let this be your year for a successful financial road trip. The following tips and tools will get you started.
1. Dream and Draw - List your Resolutions
What exactly is your dream for this year’s financial goal? Does it excite you, satisfy you and motivate you? Is it realistically achievable? Draw it out. Write it down. Make a written list and have it posted for daily viewing (bathroom mirror, computer, desk, car etc). Be very specific.
Some examples are:
| Do you want to reduce or eliminate debt? Total up your debt so you know the exact amount you want to pay off. Write this on your list. For example, “I am debt free - my $8500 credit card balance is now paid off.” |
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Is it time to build up a savings account? Add this to your list. “I have $10,000 in my savings account and add to it monthly”. |
| Are you ready to simplify and organize your finances? What would that look like? One place where all your financial papers and bills are filed? All bills being paid automatically online, through bank withdrawal, or regularly on your credit card to build up miles? Of course the bill would be paid in full each month. Then add this to your list “My finances are organized - statements and bills are all filed in one place and all bills are effortlessly paid online.” |
Writing down goals and then reviewing them daily or at least monthly, is historically the key distinguishing action step of financially successful people.
2. Dare to be Different - Create a Plan
Einstein said “You do not get out of a problem by using the same consciousness that got you into it.” This is a lot like the 12-Step definition of insanity – “doing the same thing over and over and expecting different results”. What will you dare to do differently in your lifestyle this year? Now that you know where you want to go, what is your action plan for getting there?
What following action steps would help you start to gradually eliminate debt and build up your savings? How can you make these action steps motivating?
| Outline a total spending plan for the month ahead to cover all anticipated bills and general expenses (think “latte” and “snacks”). Stick to that plan for the entire month. |
| Set up automatic savings from your paycheck. |
| Call all your creditors and negotiate for a lower interest rate. |
| Eliminate all wasted fees from: non-bank ATMs, banks, credit card cash advances, late payments, over the limit, credit card annual fees. |
| Review all your regular accounts (phone, insurance, cable) and explore lower rates. |
| Pick and choose areas to cut back or eliminate spending (beverages, fast food, electronic gadgets, CDs, books, prime time movies – don’t forget the popcorn) |
| Explore “cheap is chic” ways of cutting back but still having what you want. |
| Consider ways to leverage your special skills with computers, tutoring, music to bring in extra cash. |
| Take the time to research refinancing your car or home for lower rates. |
| Track your spending and notice where your money is going. Is this spending in alignment with your New Year’s resolutions and your spending plan? |
3. Rely on Resources - Find Tools that Work
Whatever your learning style is, there are now tools and resources available to match your style and guide you more efficiently through the financial maze.
| Participate in a classroom with other people - look up Community College, Adult Ed or Learning Annex classes |
| Sit in on a seminar or webcast, or even watch and instructional video |
| Read a book, articles and other written materials – The Budget Kit is one practical hands-on workbook among many in the “personal finance” section of bookstores. |
| Use tutorials or software on the computer – Mvelopes Personal provides a comprehensive online money management system. Or, there are numerous software packages available. |
| One-on-one with financial professionals – financial planners, budget counselors, instructors. |
Know what works for you. Gather the tools you need to be successful.
4. Follow Up and Follow Through
How will you know you are on track, sticking to your resolution and making progress? Back to the road trip analogy – Notice there is always a sign letting you know you have just left one state and are entering a new state.
| What day will you regularly review your progress? |
| What specific dollar amount do you plan to save each month or apply to debt? |
| Do your bank and/or credit card statements reflect your efforts and determination? |
| Is there a date and time set aside when you will take time to organize your financial papers, set up your online bill pay system? |
| If you got off course, what action will help you get back on track? |
5. Bring in a Budget Buddy – Accountability
It’s time to leave the macho independence behind and solicit a buddy. With today’s hectic pace and stuffed schedules, it’s not fair to yourself to try to make major changes on your own. Who is your designated coach, cheerleader, confidant who will give you the boost when you feel tired, discouraged and overwhelmed? Is there a buddy, family member, counselor, financial planner, colleague, or a member of your church that you can count on? Is there someone for you to show, compare or discuss your results with? Have them guide you as you make any necessary adjustments – whether in attitude, emotion, or financial - to recalibrate your next steps and stay on track.
And finally, what outcome(s) would give you such satisfaction that dropping your New Year’s financial resolutions is simply not an option?
Only you have the answers to the above questions and the power to change your life. Forget last year. This truly is a different year. You can do it. As Winston Churchill once said: “Never, never, never give up!”
by Judy Lawrence, Author of The Budget Kit
Author Bio: Judy Lawrence, MS.Ed. is a Budget Coach and Counselor in Silicon Valley. Her book, The Budget Kit: Common Cents Money Management Workbook 3rd Edition, has sold successfully for over two decades. If you would like a 30-minute free phone consultation or just find out more about her services and books, you can reach her at www.moneytracker.com or judycents@aol.com or 1-800-283-4380 (1-800-Budget-0).
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