1* It’s Never Too Late to Become Financially Healthy
By Joanne B. Parrotta
Do you know where your money goes? How much of it are you spending on things you don’t need? Do you feel guilty when you open your closet and see all the "must have" purchases you simply couldn’t be without but rarely, if ever, wear? Do you cringe when your credit card statement arrives?
Most people make more than enough money to live a quality lifestyle and enjoy a comfortable retirement, yet most of us struggle because we are financially illiterate. Every day, people throw away their hard-earned cash on things they don’t need. Ask yourself the following five questions:
1. Is my income consistent with my lifestyle and with the future?
2. Am I in debt?
3. Do I save a certain percentage of my monthly income?
4. Do I have enough savings for unforeseen circumstances (such as loss of job or illness)?
5. Am I happy with my financial picture?
Your answers to these questions will give you a general idea of what condition your finances are in. If you don’t like what you see, it may be time to plan how you can change your financial picture. Becoming financially healthy isn't about skimping, or missing out. It's about making sure you have a sound financial base to give you the freedom to enjoy the things you love. Establishing a new spending personality and making saving your first priority is a good start. The next part of this article can help you do just that.
2*Control Your Spending
If you ever hope to build wealth, you must cut your cost of living and keep on top of your spending. Most impulse spending is a waste of money. Just walk around your house and look at all your impulse purchases (cosmetics, shoes, clothes, CD’s, kitchen gadgets, electronics, etc.). How many of them do you use? How many could you have done without? Be honest now! Next time you have the urge to splurge, stop and think. Consider all of the times you’ve bought things on a whim.
An important part of controlling your impulse spending is to recognize any triggers, such as depression, competition, or a desire to impress, that drive you to buy things. Instead of buying things on a whim, learn to make informed purchases based on your financial goals. Improving your finances is not rocket science. It simply requires discipline.
Below are a few tips to get you started, which you will also find (in more detail) in my book, The Little Gold Book of Money and Happiness.
Ø Spend less and save more
Ø Wipe out debt
Ø Set financial goals
Ø Determine how much you need to save to finance your goals
Ø Select an investment strategy
It’s never too late to put our finances in order. All you need to do is examine your spending habits and slowly take steps to reduce your spending. Small steps will get you to where you want to be. Once you are totally committed to becoming financially healthy and you are willing to hold nothing back, you will be amazed at how quickly things start to fall into place.
Best of luck!
Joanne B. Parrotta,
Author of A Matter of Destiny: How to Find and Marry Your Soulmate
http://www.wiseadvicebooks.com
This article was adapted from The Little Gold Book of Money and Happiness: A Guide to Your Financial Success (WiseAdviceBooks, 2007) by Joanne B. Parrotta, researcher, and published motivational writer. To learn more about Parrotta and her publications, visit : www.wiseadvicebooks.com.