It is now 2015 and for many of us that means new financial goals and new budgets. For many it also means facing financial failures and stress as these financial new years resolutions fail, get off track or compromised in some manner. For some people the motivation wears off, for others they fall back into bad habits such as over spending. When this happens we end up feeling stressed out. Yet sticking to your guns and staying true to your resolutions does not have to be difficult, much of it has to deal with how we perceive things.
For many people the trouble starts with the dreaded B word, Budget. A budget is often dreaded by people who feel a budget is like a financial prison. Much like a diet a good budget can be hard to start and even harder to stick to. Your budget is the corner stone of any financial goals you have set no matter what the actual resolution is it starts with a budget. Where many people run into trouble with a budget is setting a monthly budget. If you instead focus on setting a weekly budget and set aside one day a week to go over your weekly income and expenses you will track your money better and always know where you stand financially and with your budget. It also keeps your budget firmly on your mind. Doing this weekly will help you get into better financial habits as well. You should also tally up your total debts and work into your budget a plan of action to eliminate or at least reduce any outstanding debt to a manageable level.
Saving money is another issue people struggle with. Saving money can be extremely hard especially when there is so much wants, desires and nice things out there to buy or spend our money on. Where many people fail is going all in with saving. Lets say you want to actually end up saving 15% of your income per year for retirement, a rainy day fund and perhaps investments. You try it then you fail because things came up and trying to save that amount of the bat is just so hard. What I always advise people in this situation is to start slowly. On the first month try to save 2% of your income towards this goal. Two percent is not much you will hardly notice the money not being there to spend. Once you are used to that up it to 4% or even 5% to your savings at a time when you feel ready. Rinse and repeat increasing this amount as time and your willpower dictate. It is much easier to ease into savings then go all or nothing.
You should also focus on increasing your cash flow this year. For many of us this means a raise in pay. Last year the rate of inflation was 1.3% so to truly be making more money you would need a raise that surpasses 1.3%. If your income is raised by only 1.3% you are not in fact making more money you are just keeping pace with inflation. Income is a huge factor in wealth creation over time and income is a key to any financial goal you set.