Personal finance planning can bring peace and security to your household, if you stick to it. Financial planning doesn’t happen accidentally or by default. It can only be the result of a conscious decision to take stock of your financial situation and then take action to improve it.
"When a man is in love or in debt,
someone else has the advantage.”
- Bill Balance |
How many of us don’t plan anything beforehand when it comes to our finances? How many of us just live from paycheck to paycheck, paying our bills without thinking about it; spending money carelessly as if we had a limitless supply of it? So many people today pay little to no attention to their budget and skip the personal finance planning process altogether. It’s no wonder we’re a nation of people knee-deep in debt! Remember, if you fail to plan, you plan to fail. Short of winning the lottery, no one becomes financially independent by accident. It can only happen if you DECIDE to do it, and PLAN to do it. First you must take stock of where you are. Look at your financial situation; your income; your expenses, and your debts. It might help to take a month in which you write down every single penny you spend. This will help you get an accurate picture of your spending habit; how much you actually spend in a month, rather than just guessing. A lot of small things add up quickly; the daily latte, the frequent visits to the vending machine at work, etc. These all add up to a lot more than you might think. Once you have an accurate picture of where you are now, your personal finance planning activity can go to the next step: deciding where you want to be, and how to get there. Look at your list of monthly expenses. Which of them can be reduced? Get creative and take ownership of getting the most out of each and every dollar you earn. Which expenses can be eliminated altogether? Find ways to make the money you’re already earning go further. This is the key to winning the financial game. It sounds easy on paper, right? Personal finance planning always does. It’s one thing to SAY you’re not going to stop at Starbucks anymore; it’s quite another to actually follow through with that. Securing your financial independence is mostly a mental task. You have to commit to sticking to your new, tightened budget. You have to envision how great it will feel to be out of debt, how much you’ll enjoy having more money to take vacations or to buy nice things. Basically, you have to want great things in the future more than you want good things now. It’s easy to forget the big picture and to focus only on the present. However, if you’ll stick to your budget and aggressively pay off your debts, you’ll see the rewards that come from it. More importantly, you’ll feel a sense of pride and accomplishment you’ll never experience from charging things on your credit card.
"Do not accustom yourself to consider debt only as an inconvenience;
you will find it a calamity."
- Samuel Johnson |
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Debt is NOT your friend. It's not a wonderful "tool" for building wealth. That's a myth.
