This year, I've vowed to make one monthly commitment at a time instead of year-long resolutions, which never seem to work. February was for Finishing (i.e. projects, tasks, and commitments). This Month, I'm a Money Management Maven.
I have a friend who would always ask me to help her develop a budget. Each year, we would put together a spreadsheet detailing what she would spend. However, she would never spend accordingly. I finally told her "what goes on the spreadsheet doesn't matter. What you do with your money is what matters."
You have to start somewhere, and here's where I'm starting. 1.) I'm committing to increase my saving by 2%. That's not a lot of money, short-term. But, over a lifetime, it could prepare me to retire one year earlier. 2.) I'm reducing my waste. If you toss out spoiled milk, if your cereal is stale before you eat it all, or if you trash bags are only half full when you toss them out, you have waste. Take stock of what you purchase, how much, and when. You might need to make some adjustments. I'm making a concerted effort to only buy what I can consume; that's better for my pockets and my planet. 3.) I'm also spending less on nonessential consumption like gourmet coffees, cosmetic services, and junk food. This requires my household to go into do-it-yourself mode. We can park our own cars instead of using valet. We can plant our own flowers instead of hiring a landscaper. And we can iron our clothes (more often) instead of paying the drycleaner to do it for us.
Solid money management takes discipline, self control, and patience. Instant gratification must take a backseat to sensibility. We have to learn to wait patiently for what we want instead of buying it before we have the money for it. For example, we need to purchase new tires for a car. We should save up for the tires, rather than financing them which would result in paying more for them. The same with saving up for Christmas, vacations, school supplies, or any other recurring expense. Even though the holidays are a long way off, you know they are coming. It doesn't have to catch us by surprise. Why not save a few bucks each week for the next 9 months to ensure you'll have enough cash on hand for gifts? The holidays are supposed to be a joyous time. Debt does not equal joy to me! How will you 'find' a few extra bucks to put aside each week? How about giving up that daily latte, weekly lunch outing, or monthly shopping trip? Saving $15 a week will yield more than $800 in a year's time.
Developing better spending and saving habits is an integral part of getting your financial future on track and earning financial freedom.
