A new year here and we’re all thinking about how to make better decisions so that we come out of top financially. Take a look at the list below and incorporate a few, if not all into your daily financial life. Commit to being a better steward of your finances and you will certainly reap the benefits.
1. Create Your Financial Plan and spend some time each week developing and reviewing your plan to make it happen. With every financial transaction, top of mind should be “how does this fit in with my financial goals?”
2. Daily: Take 10 minutes to review your main accounts. Make certain that all charges are accurate and review any purchases you may regret later.
3. Weekly: Review all transactions to help you stay on track with your financial goals
4. Monthly: Review your accounts to make sure that all bills were paid on time or are scheduled to be paid. If the funds aren’t there then call the institution to alert them of an expected payment date or work out a payment plan
5. Quarterly: When creating your financial plan, create milestones that benchmark your progress. For example, If your plan is to pay off $10,000 in 12 months then by month 3, you should have $2500 paid off. If that doesn’t happen then it’s time to readjust the plan and move the goal or play catch up.
6. Write down your financial goals. SMART Goals are the best way to orchestrate success in this area.
7. Set your finances on autopilot. Set up every recurring expense using Bill Pay or via ACH draft.
8. Create a goal statement: My intention is to ________________ in order to achieve financial freedom
9. Spend less than you earn
10. Save 20% of income for savings and retirement
11. Pay down non-mortgage debt to less than 15% of income
12. Think long term and spend time in fruitful investments for the future, for example: start a business
13. Read at least 1 personal finance book every month. Keep abreast of emerging financial issues that impact your life.
14. Be mindful of emotional spending. Shopping when you’re sad, mad or depressed often leads to purchases you’ll regret later. Address the core issues, as emotional spending only slaps a temporary cover-up on the problem.
15. Spend more time with others who are where you want to be financially. Doing this helps you compare and contrast how you operate with money in comparison to them while helping you make changes along the way. As my pastor likes to say, seek those who have your solution and get away from those who have your problem.
16. Everyday, day dream and feel what it will be like when you reach your financial goals: debt free, 6-12 months of emergency fund savings-whatever it is-dream about it, talk about, write about it and make it happen.
17. Buy things that will last longer than it takes to finance them. If you finance a TV (you really shouldn’t!), then it should last longer than the time it takes to pay it off. This goes for anything, whatever you buy should still be useful 6 months from now.
18. Give back. This can be with your time or money. Spend time time giving back to others less fortunate than yourself.
19. De-clutter your finances. What are some things that you’re paying for (magazine subscriptions, extra trips to the makeup counter, techie gadget impulse buys) that leech money you really need to hit your financial goals.
20. Spend time in the future. Leave financial regrets in the past as they took place in order to teach you lessons for the future.
21. Financial problems teach you the life skill of problem solving. If you can dig yourself out of financial ruin, then you’ll be surprised as how you face life’s other challenges.
22. Research account aggregation tools and commit to monitoring your money on a consistent basis.
23. Every dollar in your budget needs a job. None should be idle and without purpose.
24. The coming financial year won’t be perfect. But commit to learning from your mistakes to avoid making them again.
25. With financial freedom comes peace of mind. Work towards this and see how everything else in your life falls into place. Money problems are often the root of other difficulties in life including health and relationships with others.
26. Don’t compare your financial situation to others who are in a better position than you are. Remember, like you they had to work to get where they are and if you take anything from their situation, it is that you can one day be financially free yourself.
27. Find peace with your financial past. You may have had some situations that put you in a financial hole but the best part is as long as you’re alive today, you have another chance to make things right.
28. Make some hard decisions about your spending habits. How will you Tame Your Achilles Heel? The more insight you have into this area, the better decisions you’ll make.
29. Find ways to earn more money. Developing multiple streams of income is key to financial freedom.
30. Your friends won’t bail you out of financial ruin if you continue to make bad decisions. If spending money on happy hours, eating out and partying on the weekend take you away from your intended financial goals then it’s time to reassess how you spend your money and time.
31. Do the right thing! Avoid “because I deserve it” and “I’m stressed and need retail therapy” purchases. You’ll almost always regret them and they do nothing to fix the core issues.
32. Enjoy this time in your life. There are many life lessons to be learned. Spend this time not only about creating a budget but how you got here and the plan to move forward and not fall back.
33. Sell anything that you haven’t touched in 6-8 months and pay down debt or plug into savings.
34. Discuss your financial plans for the coming year with your partner or spouse. Make sure you are both on board with goals and how you will address setbacks. Commit to reviewing goals weekly, monthly and quarterly.
35. Start having weekly “family meetings” with each other (couples) and monthly with your children. Part of these meetings will address family finances which discuss spending habits and financial goals.
36. Teach your children about the benefits of entrepreneurship. Instead of another Elmo, PS3 or XBox, give them a gumball machine that they will own and operate. This teaches them the inner workings of how a business is run while learning the world of business at a young age.
37. Give children gifts that will last long past the next birthday: create a college fund or add money to a college fund
What are some tips you have for leading a healthier financial life?