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Budget Cents: Top Tips to Help You Master Your Money This Year

Posted by : Premraj | Posted on : Thursday, February 4, 2016

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How’s that New Year’s Resolution working out for ya? Have you made any progress on your finances?

Many people make lofty goals, but never follow through on them. For some, they get stuck – finances are hard and they’re afraid of making mistakes. For others, it’s laziness. Here’s how to buckle down and make something happen this year.

The One Thing No One Tells You About Setting Realistic Goals

“You need to set goals.”

Goals.

Goals.

Goals.

You hear it all the time. In fact, you can’t read through an article on personal finance these days without someone yammering on about goal-setting. But, for all the talk about setting realistic and meaningful goals, you still haven’t done it. Why not?

Truth is, it’s not your fault. You were misled.

You see, most people talk about setting goals as if it’s either easy or as if you can control the outcome.

So, when someone says, “you need to set a savings goal,” what they really mean is “you need to set a goal to have a certain amount of money by the end of the year.”

Not realistic.

Why?

Because you don’t know what will happen by the end of the year. Your goals need to be processed-based, not outcome-based. In other words, set goals on processes which are things you can control. Don’t set goals based on outcomes that you can’t control.

For example, you can’t control whether you win or lose a marathon. A lot of things can happen out there on the pavement. Maybe you’re not feeling well that day. Maybe you suffered an accident 3 weeks out from the race. Maybe trip, and fall, during the race and that sidelines you for a while.

And, when you lose, it’s going to be a devastating blow to your ego. It’s going to crush you.

But, if you make a goal to attend a certain number of races, to get out and run every day, you’re making more process-oriented goals. You’re making goals to do things that you can (mostly) control. You can control whether you get up in the morning. You can control whether you get out every day and pound the pavement.

You can’t control whether someone else is faster than you or not.

Focus On Saving Money

Keep a strict focus on saving money, not on investment returns. Again, this is something outside of your control. Most people make the mistake of trying to set goals about how much they’ll earn in the stock market or how much they’ll accumulate after 30 years.

That’s not up to you. It’s up to a distributed marketplace of several hundred million people. But, you can control how much you save. So, focus on that instead and choose an investment that carries a reasonable risk given your other financial goals.

Set a dollar amount you will save and just do it.

Take Care Of That “Ticket”

According to Davis, Saperstein & Salomon, vehicle accidents sometimes result in tickets being issued by the police. And, if you’re like a lot of people, you drag your feet on paying them. Not because you want to break the law, but because you have lots of other things on your plate already.

But, it’s not just traffic tickets. It could be other legal or financial matters, or maybe something you’ve been putting off for some time.

Don’t let it go, because often these things come back to bite you, and by that time, they’re really very expensive.

Aidan Holloway is a personal finance consultant. He enjoys helping everyone to make the most of their money, no matter how much they have, and regularly blogs for personal finance blogs sharing his tips and advice.

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