It’s no surprise that at this time of year (the beginning of January) there are numerous articles about setting your goals for the New Year. It was interesting to read that many of the articles noted that people who are financially wealthy make financial plans and set financial goals – they know how much they will save and spend and for what purpose. It turns out that financially wealthy people spend twice as many hours planning their financial strategy as do the non-wealthy. So, it’s really is a fallacy that people with money don’t watch their dollars.
It was several weeks ago that we started on the goal to get our financial lives in order. In my last blog “A Resolution You Can Keep – Getting Organized,” we organized the paperwork. The next step is to find out where the money goes. You’ll want to refer to that last blog because you’ll use similar categories to track your expenses.
The bottom line is that you need to find a way to keep track of what your income and expense are. There are any number of ways to do this. Certainly there are several computerized personal accounting software programs. Several come to mind – Mint, Quicken, and Moneydance. (I use Quicken Home and Business for myself and my clients.) You could also use a computerized spreadsheet program such as Excel. Ruler columns on a piece of paper work fine as well. But the trick is to figure out what funds are coming in and which funds are going out….and to spend less than what is coming in.
I set aside an hour each week – for me it’s Saturday morning – to update my Quicken files. During the week, I keep all my receipts in my wallet and pull them out on Saturday morning to handle my data entry. It’s even easier if you download the info directly from your bank and or credit card account.
Once you have collected the info for a month to six weeks, you will have a good baseline to start a personal budget. Knowledge is the key – so indulge in a bit of self-education to understand your personal financial life because this is the foundation to your future financial success.
And, if you have trouble setting up an Excel spreadsheet or want a premade one, please feel free to reach out to me, Liz Crystal – liz@thelcgroup.net, and I will be happy to email you one.