Your personal finance review will keep you up-to-date on your spending habits and keep you on track to living debt-free. What good is a budget without an occasional review of your progress? Why, it would be about as good as going on a diet and then never stepping on a scale to check your progress.
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"No man's credit is as good as his money."
- Edgar Watson Howe |
We focus a lot on planning your budget, determining how you’re going to pay off your debts, and so forth. Once you have a great budget in place, you’ve done a lot of the work. But you mustn’t forget the monthly check-ups, to see how you’re doing! It’s easy to slip up and overspend, but if you’re engaging in a regular personal finance review, it will be much easier to catch those mistakes and rectify them. You probably created your budget by carefully keeping track of your actual expenses over the course of a month, then analyzing them to see what could be reduced or eliminated. Then, with that information in mind, you devised a new, reduced budget. This new budget would not be a reflection of how you had been spending money, but of how you were going to spend money from now on. It involves some sacrifice, because you’re eliminating or reducing some expenses. That’s why the personal finance review is so important. You need to watch yourself to make sure you’re actually following your new, revised budget. It may be difficult at first. You’re sacrificing a little, and you’re not used to the new plan, the one where you’re NOT supposed to stop at Starbucks every single day, or where you DON’T get to go to the movies twice a week. Monitor your daily spending very carefully. Balance your checkbook regularly, and look at your bank account online every few days. Hopefully, your regular personal finance review will show that the budget is working well, that you’re able to stick to it, and that you’re not too overwhelmed by it. If you find you’re not following your budget, examine the reasons why. Are you lacking in self-discipline? Or are some of the requirements you’ve made for yourself simply not realistic? If you’ve been in the habit of getting a latte every single day, maybe it’s not practical to suddenly decide you’re going to stop cold turkey. Maybe a better plan would be to get a less expensive item, or to only go twice a week. Be firm with yourself, but be realistic, too. There can be a little give and take and some minor adjustments as you grow accustomed to your new way of saving money and controlling your finances.
"Some debts are fun when you are acquiring them,
but none are fun when you set about retiring them."
- Ogden Nash, American Writer |
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Debt is NOT your friend. It's not a wonderful "tool" for building wealth. That's a myth.
