Better Money Management Habits This Year?

This is the time of the year that most of us take a few moments to reflect on the events of the past year and to take stock of those things that we would really like to improve upon in the new year ahead. 

I like to challenge my clients in December to set at least one financial goal and to make a commitment to begin tracking every penny they spend in the new year. Keeping a detailed list of daily expenditures is the first step in truly working to improve ones personal and/or business finances. I say if you're not tracking it, you're not working on it. When money is tight, people are more likely to pay close attention to their spending. When times are good and cash flow is plentiful it's easy to waste money by over spending on things that we really don't need.

Good money management requires two components, a financial goal, and a system for tracking progress toward that goal. If your goal is to accumulate $1,000 in your savings account by March 31st. and your game plan for accomplishing that goal is to cut out all unnecessary spending so that you can save as much as possible each week, then your system for tracking the goal and game plan is to track any and all spending. Your commitment to the goal and the act of tracking your spending will cause you to think about your goal before making any expenditures.

Successful people do the things that unsuccessful people are unwilling to do. My experience in working with people who have created personal financial security and wealth for themselves is that they didn't do so by accident. They pay close attention to their spending and they avoid wasteful spending by focusing on goals.  Developing good money management habits happens on purpose and it happens over time.  

Challenge yourself to become a better money manager in 2016. Set a specific savings or debt reduction goal by March 31st. 2016, and begin tracking your spending and progress toward the accomplishment of that goal today. Best wishes for a Prosperous new year.