Even smart people make mistakes. Many people who have picture perfect careers are taking photographs with the lens cap on when it comes to their personal finances.
Or, if they have the lens cap off, they are too busy taking pictures to pay enough attention to the subject matter – their personal financial affairs. Either way, the result is – they make mistakes – big mistakes that can cost them a great deal of money.
AMONG THE WORST MONEY MISTAKES IS:
*NOT SETTING GOALS. Rather than saving what is left after paying the bills (which for many may be close to nothing) make a commitment to yourself to save a specific amount of money – and then do it.
The first thing to do is set easily attainable short-term goals that are going to have a positive outcome. For example, decide how much money you want to save in one year and cut it up into bite size pieces. Allocate a fixed amount of your net income as savings and pay yourself first. Use the remaining cash to figure your personal budget. Be realistic so you don’t fall into the trap of saying “since I can’t save xxx dollars, I might as well not save any…” and “… I don’t know where all my money goes, but I don’t have any left for savings…”
Be successful in reaching your savings goal by creating a workable savings plan. Take your annual savings goal and divide by twelve. Then promise yourself that every month you will save that amount. Allow yourself some flexibility while guaranteeing your success. If you get paid bi-weekly, plan to save an equal amount out of every check, while allowing for minor setbacks – promise yourself you will make up any deficiency from one paycheck by the end of the month – to reach your monthly savings goal.
The key is to set realistic, attainable goals, make them manageable, and keep a promise to yourself. Once you get started on a positive savings trend you won’t want to quit, and before you know it, you will have reached your goal… just in time to set another one.
This article was written by Gary Field, CPA at Numerico, PC. Click here to view Numerico’s website.
