Our latestthe ultimate budgeting guide
Whenever you want something better than what you currently have now. You have to change something, if you keep doing what you're doing, you're going to keep getting the results you're getting. So if you want better results, you have to be doing better things.
Forward planning-deciding what you want and working out how to get there- isn't just for the super rich: it's something you can plan for your spending, you can fund your dreams (often for less), and enjoy them without worrying how you're going to cover the cost afterward.
Personal finance is inherently personal, and you should look at lists like this as a buffet of options where you choose the ones that really fit with your situation and skip by the rest.
Today, I'm presenting a list of 3 extremely powerful financial changes that you can make to inprove your life to change your trajectory.
1. Find ways to reduce your expenses:
Unless you have ways of earning addictional income, this is where the money will come from to fund your goals. You have to be consistently spending less than you earn, paycheck after paycheck. If you can't do that, or won't do that, you will not have lasting financial success.
That leftover "gap" money is the money you use to build your financial future. Every time you choose to cut into that "gap" by buying something frivolous, you cut into your financial future, "
The first step is to look at your bank and credit card statements to see where your money is going. Then get rid of anything unnecessary or wasteful that you can eliminate or replace. Some example can be a gym membership you don't use or can replace by exercising at one or outdoors, a subscription to a newspaper or magazine you don't read or can access online. And so much more.
If there is a fundamental rule of personal finance, it's that you have to spend less than you earn and do something smart with the difference, and do it consistenly.
2. Journal about your future life.
I'd like you to add a journal to your retirement binder. You will use this to document ideas and thoughts about what your future life (style) will look like. For this step, I specifically suggest using pen and paper, because research suggests that there's something about filling blank page that will enable you to more clearly think through your options as opposed to typing up a bullected list in evernote.
You can freehand write, you can draw pictures and doodle, or you can make lists. Here are some prompts to help you get going- feel free to add to your own tweak.
- What do I know for sure?
- What do I enjoy now that will be part of my future life?
- How will I spend my time in retirement?
- What am I excited about in my financial future?
- What are my worries about the future?
Don't worry about having all the answers now, because yes, things can change if you are spending a little bit of time thinking about this. You'll be far ahead of most investors.
3. Eliminate regular bills that aren't giving you enough value
Go through every single one of your regular bills and subscriptions and ask. Yourself what value you're getting from that service and whether it's worth what you're paying for it.
Decide for yourself which services and subscriptions actually bring value to your life. Is it worth paying for cable? It is worth paying for that gym membership? It is worth paying for Netflix? Is it worth paying for car registration and insurance (meaning do you really need a car)? For things like insurance that are little abstracted, consider the value they bring in terms of the safety net they're presenting and whether they are required by law.
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