by Phylecia Jones, Budgetologist & Solopreneur Money Management Expert www.keepupwithmrsjones.com
When it comes to your financial matters, how serious are you? It’s a tough question, but with consumer debt estimated to reach $4 billion dollars according to CNBC by the end of 2018 and Americans struggling with having savings for small emergencies, it brings the issue of financial priorities to the forefront. Creating financial goals is not an issue for the average person. The Motley Fool says paying down debt, saving more money, and avoiding further debt are the top 3 financial goals most people set.
But, at times, our goals do not match the realities of how we are actually managing our money. Facing the hard truths about how you see and interact with your finances is difficult, but for significant changes to happen you will have to start with YOU. If you are constantly missing your financial goals or never taking action, you may be falling into some common traps that can take you off course from achieving your money milestones:
Being comfortable. When the bills are paid, money is coming in, and life is running like a well-oiled machine, it can be hard to take action when everything is okay. This is the perfect time to look 5, 10 years down the road and create financial milestones for where you want to be versus where you are right now.
Trying to keep up. Keeping up is a one-way ticket to debt, stress and despair. Stop worrying about others and focus only on your financial goals.
Assuming the bread winner will always make bread. For many couples, assuming the other person will always make money can be financially dangerous. Losing a job, sickness, loss of income are things we never think of when it comes to being in a relationship, but a small change can cause major waves. Create an emergency savings plan to cover the unexpected.
Avoiding doing the work. Getting out of debt. Saving 9-12 months of emergency funds. Paying off student loans. All are very intimidating tasks but avoiding them is not an option. Take the time to gather the resources needed to set you up for success and create a plan to tackle one task at a time.
Having priorities that do not match your goals. You have the goals, but you keep putting them off because of the next shiny object. Impulsive shopping and overspending has ruined many financial plans. Take the time to track your spending over the last three months. This simple action will put you face-to-face with a financial reality check. Ultimately, making a small shift to take ownership of your financial matters is key to getting out of debt, saving more money, and avoiding dire situations.
Facing the hard truths about money management can be uncomfortable, but change does not occur in your comfort zone. With record high debt and 65% of Americans saving little to nothing, it is time to put a stake in the ground, change your perspective, and take your financial matters more seriously.