There are two real problems with managing money. The first is that we make excuses to ignore it, and that means falling behind in keeping our checkbooks and accounts updated. The second is that we lie about our finances to ourselves. The one has a definite effect on the other, but it is still very easy to lie to yourself about your finances even if you meticulously track them. That is one of the reasons people go so far into debt.
To help get your finances under control, it is time to take an honest look at them in PIMYU.
– Look at your finances in full, not just the parts you want to see. Whether you ignore your finances or you track them religiously, you need to make sure you regularly get the big picture. Yes, it is good to know that you overspend in a particular area, but that doesn’t mean that the regular little over spending in other areas isn’t hurting you. Maybe you are paying down one of your credit cards, but this is causing you to entirely skip putting any money into savings.
– Make goals and keep them realistic. Dreaming big is good, but also makes it much more likely that you will not succeed. If you haven’t made or followed financial goals, it is best to develop a sense of achievement first. The best way to do that is to do it incrementally.
– Take the time to be exact with what spending you count as discretionary. You need to know when you are spending money you don’t need to so that you can start being more frugal or more attentive to your habits. You may find that the more aware you are of habitual frivolous spending, the more likely you are to stop the habits you formed that make you more likely to avoid situations that make you more susceptible to overspending. For example, if you know that you are spending a lot in junk food at the grocery store, the more likely you are to rethink that “great sale” for items you don’t need.