We are still in the first quarter of the beginning of the year and most research continues to show that the top priority on most people’s list of “New Year’s Resolutions” is to get fit and stay in shape. The top three resolutions continue to be: “I plan to lose weight, eat healthier, and exercise more.” While these goals are important and worthy of being in the top five of our things to accomplish, it is imperative that we begin to take a serious look at the condition of our current financial status. Unfortunately, many of us could pass a physical fitness exam, but come to discover that we are in terrible shape financially. Many will agree that having the discipline to exercise regularly can increase one’s stamina. But if we would exercise and practice new financial disciplines, it would increase our wealth and help us get financially fit.
It is imperative that we take a serious look at the condition of our current financial status.
Below are the top seven things you can do to whip yourself and your household into financial shape:
1. Budget: Just as planning your meals and portion control are the best ways to get control of your eating habits, planning your spending is the best way to get in control of your finances. Making your budget is simple: subtract your income from all of your expenses. If the sum is negative, you’re spending too much.
Planning your spending is the best way to get in control of your finances.
2. Watch Your Habits: The health of your finances is the sum total of your spending habits. So track your spending for at least 30 days to identify your bad spending habits and cut them out. It’s a matter of financial life or death!
3. Set Financial Goals & Write Them Down: Written goals serve as a powerful reminder of what we’re striving for. Look at them daily. Break your goals down into small realistic financial goals. Whether it’s paying off your smallest bill first or saving $1,500 for emergencies, accomplishing small goals keeps you motivated in what can otherwise be an overwhelming process.
Written goals serve as a powerful reminder of what we’re striving for.
4. Pay Your Bills On Time: Not paying your bills on time is like forgetting to work out: the negative effects add up over time. For example, if you paid four bills late each month and incurred a $30 late fee for each bill, that’s $120 a month or $1,440 a year. In ten years, that’s over $14,000 in fees paid. Set up auto-pay to make sure they get paid on time. I’m sure you could use an extra $14,000 in the bank.
Also, late payments will damage your credit history and significantly drop your credit score, costing you more money in higher interest rates for home and auto loans.
5. Pay Down Debt: Having too much debt is like carrying more weight than is healthy. And paying 15% interest on your debt monthly is the equivalent of eating five donuts a day hoping to lose weight. Lose the debt weight by paying off excessive/unnecessary debt.
Having too much debt is like carrying more weight than is healthy.
6. Pay Yourself: Make paying yourself a priority by saving each month, even if it simply starts at $10 per week. Start somewhere and stick to it. Put it on auto-transfer to avoid forgetting.
7. Make Necessary Changes: Small lifestyle changes add up over time. Do you really need all those cable channels? Do you really need to eat out every night or every weekend? If you continue to do what you’ve always done, you’ll continue to receive the same results. Financial success only comes to those who sacrifice.
Do these seven things and you’ll notice the financial weight and stress start to shed as you get into the best financial shape of your life!