When it comes to our finances, we often look at the big picture of where we are in life compared to where we want to be. We make plans for the future in hopes of achieving our financial goals, but we don’t pay as much attention to the smaller decisions that we make with our money daily. No matter where you’re trying to go, getting there requires small steps in the right direction.
Unless you receive a financial windfall, it’s difficult to make big changes that affect your financial life overnight. But there are several small things that you can focus on that add up to make a big difference. None of these tips are secrets, but taking the time to focus on these small things will give your bigger dreams a better chance of coming true.
– Have a System and Discipline: There are a million ways to keep track of your money and spending and it’s up to you to find the right one for you. Whatever you choose though, keep track of your income and your outflows. When you go to the store, spend only what you planned on spending. It’s amazing how many people don’t understand where their money goes each month, but it’s easy to figure it out with a little organization and discipline.
– Save Systematically: Most people want to save more money or pay off debt, but building a savings account or paying down a credit card balance takes time. Since you can’t snap your fingers and make either of these things happen, set up an automatic payment plan. If you’re paying off debt, the payment goes to your credit card company. If you’re saving money, then you’re paying yourself. Either way, you’re much more likely to stick to a plan if you establish automatic transfers every month or every paycheck.
– Don’t Leave Money On The Table: If your employer put a stack of money on you desk that represented between three and six percent of your yearly salary and offered to let you keep it, you’d gladly take it. Yet many employees literally leave money on the table when they choose not to take advantage of a company match and contribute to their 401K. Your first source of saving should be your 401K when there is a match involved and the power of compounding interest will work wonders on the “free” money from your employer.
Be Able To Sleep At Night: Hopefully your finances don’t keep you up at night, but you probably know someone in that situation. Someone who is overextended is likely to struggle if they’re looking for financial peace of mind. The steps described above will help you sleep better at night. Another “peace of mind” idea includes having enough insurance in place that an unforeseen event won’t derail you financially.
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