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Friday, March 2, 2012

Five Easy Steps to get those finances back on track


Five Easy Steps to get those finances back on track

Here we are in March already.  If you are like most people, you probably spent January’s budget recovering from Christmas and didn’t quite get around to thinking about what next. For those of you who made the goal to get on top of your finances this year, I’m here to help get you back on track and give it your best shot.

It’s hard to get your head around money sometimes, especially if you haven’t really focussed on it before, not least of all because it involves maths.  So here’s five easy steps you can take to get motivated again and make 2012 the year you hit your financial goals.

Step 1 – Define your reason for wanting to make changes
Change is hard for most people, and habits can be especially hard to break.  People who are successful in making changes, whether it’s to their health, finances or something else, usually have a very well defined reason.  So if you want to make some changes this year, have a think about why this is, get it very clear in your head and then write it down so you can remind yourself every time you start to veer off track again.

Step 2 – Start with small goals
It’s all very well to say, “I want to be rich”, or “I’m going to save $10 000 this year” but if you don’t have a plan or you don’t believe it’s possible, it’s less likely to happen.  Smaller goals such as “I’m going reduce my credit card balance by $200 each month,” or “I’m going to save $50 out of my pay each week”, are goals that we can believe are possible and therefore ones that you are more likely to stick with.

Step 3 – Don’t spend $5 notes
This is a very easy way to save money.  Each time you get a $5 note, put it away into a drawer at home.  You’ll be surprised at how much money can be saved this way – and you won’t even miss it.  If things are so tight that the fiver is needed, ask for your change in coins so you don’t have to break the rule.

Step 4 – Don’t play catch-up
Trying to make or break a habit takes time and work and inevitably we slip up. If your goal was to save $50 out of each paycheque and one time you couldn’t because of an urgent bill, don’t try to take out $100 next time.  This only puts strain on the next pay cycle.  Simply acknowledge the misstep and start again with your original goal next time.

Step 5 – Plan a reward for your achievements
It’s easier to stay on target if there is something to look forward to at the end.  Tell your friends what you plan to do so that they can help you stay on track and celebrate with you on your achievements.  An example of this might be, “Once I have saved $1000, I’m going to spend $100 on some new shoes”.

There you have it folks, five easy ways to get those finances back on track.  For more advice on money or your free money health-check, email michellecroner@y7mail.com.  My new E-book for young adults, Do I Have To Get A Job? will be available soon.

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