This year let's start off with a financial plan to change what has been wrong with our spending habits.
Examine your goals for 2010.
How you spend your money is a decision that you make. Most people have no idea where their money goes. I suggest that you keep track of every penny you spend for at least 2 or 3 months. I know it is a big commitment to make but it will pay off. Once you become aware of where your money is going, you can then get control of it and you will see where you can save. One small $2 coffee every day adds up to $730 over a year's time. Spending is a habit and habits can be broken! Or changed!
Give yourself an allowance and make it in cash. Use it for entertainment which includes dining out, movies, lunches, etc. When it is gone, you don't get any more for the time frame you decided on. Don't try to set it up using your checkbook or credit card because it is too easy to over spend.
Next thing to do is get rid of all credit cards that you carry. Only carry one credit card on you with a small limit amount for emergencies that might arise. Start paying down your debt .
A new habit to start is saving! Small amounts will add up in the long run. Don't think of "I need 6 months of income to be on the safe side". Statements like that make you feel like it is an impossible task so you don't even start. Every bit helps and the only way to get there is to start.
Set up an automatic savings payment plan if you can. Most banks will do that for you if you don't have it though work. Never having the money in your hands makes it much easier to save because you don't even think of it as spendable income.
Hope this helps some of you and that we all have a better New Year 2010.
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