How do you feel about your money situation in 2012? Was it better than expected? Worse? Are you "planning" on making 2013 better? Are you committed to making it happen, or are you going to be like most people and "should" all over yourself talking about what you're not doing. Are you committed to use only an hour or so of your vacation time to finally achieve what you want?
Remember, you can't expect to have different results thinking and acting the same way you did last year. It requires new commitment and a new strategy. Besides, do you really want to end up like most who get disappointed they got similar results as the previous year? Even if you did better in 2012, do you wonder why you didn't have more savings or pay off more debt? Because I understand our human nature (being human myself), I am offering 3 simple ways that has worked for me that WILL improve your financial life in 2013.
- Create a budget by reviewing at least 6 months from 2012
- Set objectives for 2013
- Spend at least 3-5 minutes weekly actively tracking your money
That's it! Let me explain each of these further so you don't just read it, but never act (big pet peeve of mine).
1. Create a budget by reviewing at least 6 months from 2012
This one is the most time consuming, but fortunately, you only have to do it once this intensely. A great tool to use is setting up a free account at Mint.com and connect all of your personal accounts. If you want to track business expenses, use QuickBooks, Quicken, or a free site, like Mint, at Outright.com. Once you've connected your accounts, go back as far as you can, and start categorizing your income and expenses. Warning - This is the toughest part! But once you do it, and follow the other steps, it gets easier.
Once you've done this, go into the Budgets section (or the Trend section), and view the average you have spent each month. From there, create a rough budget. Don't get too married to this number since it can change on some of these when you track it for 12 months or more. There are great tutorials to help you with this. The key is to get started here and commit to doing it all year long.
2. Set Objectives for 2013
You need to have a driving force (a big "why") to inspire different habits this year! Although you may like it, I can't stand using the word "goals." Goals, in my mind, are those lofty dreams you set only to get disappointed later. I prefer to use the term "objectives" because it sounds like I'm on a mission and it MUST be accomplished. However, use whatever word works best for you.
Be sure to set objectives that you are at least 70-80% sure you can achieve and that excite you. It must be measurable, believable (with some effort), and excite you! These are objectives (goals) that you cannot give up on nor be too "airy-fairy." It's okay to set an objective that is only a little better than last year. Remember, progress over perfection.
3. Spend at Least 3-5 Minutes Weekly actively Tracking Your Money
This one is the simplest, but many people fail here. Tracking your money is like working out, but WAY easier. Each week, we should be spending at least 2-3 hours exercising, right? But all I ask is that you spend no more than 5 minutes each week tracking your money. Imagine if you could get a super lean and fit body working out only 5 minutes per week! So why not spend that time tracking something that affects every aspect of your life - your money?
The neat thing about these programs, is they remember how you categorize, and you don't have to do much maintenance. For example, if you shop at Costco and categorize it as Groceries, the next time you shop there, it'll automatically categorize it in Groceries. Isn't that awesome?! All you have to do is make sure they are categorized correctly, make sure your budget is working, and make sure you are profitable each month (more income than expenses).
Doing these 3 things alone will increase your odds of success this year! I've also noticed people saving money and paying off debt faster just because they are actively tracking it rather than spending whatever they have and fighting with their spouses about spending money. Acting on these simple strategies will guarantee less stress and better odds that you'll achieve your financial desires in 2013.
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Now, stop procrastinating and get to work!!!