Stephen Covey, author of the “7 Habits of Highly Effective People,” wrote, “Begin with the end in mind.” When you sit down to map out your financial dreams, remember that advice. Do you want to be a millionaire? Do you want to own multiple homes? Or is your goal something more basic like paying off your credit cards or putting your kids through college?
It doesn’t matter because in all the scenarios, you need to know where you are going so you can plan how to get there.
Step One: Write down your goal.
Step Two: Break that goal into smaller, incremental goals. For instance, if your goal is to be “debt-free”, smaller goals would be “pay off store #1 credit card by a certain date.” Another would be “don’t add more credit debt this month.”
Step Three: Assess where you are now. What are you working with? What is your income from all sources? What are your fixed expenses? What are your discretionary expenses? By writing these down, you will start to see places where you can cut and save.
Step Four: Make the hard decisions. Look at your numbers and start making the hard decisions on where to save money. Can you cut back on cable and cell phone plans? Can you switch utilities or insurance carriers? How much are you spending on personal and family entertainment like eating out, movies, or similar venues? If you are committed to your goal, you will find these cuts less painful.
Step Five: Get everyone on board. Once you’ve determined where and how you can save, make sure the whole family is on board. Track your expenses and post where everyone can see where the money goes. When you reach your goal, you can celebrate your successes and talk about the money lessons learned.
For more tips on budgeting and goal setting, call us at 800.991.2221. We are here to help you achieve financial success and to make the steps along the way a little easier.
Source: PSB, our valued partner.