The New Year is just a few weeks old, and those annual resolutions like "lose weight" and "stop smoking" have already fallen by the wayside. Now it's time to get serious and take some easy steps toward getting your finances in order.
This doesn't mean that you've got to live on a budget, track every penny that you spend and invest with the zeal of Warren Buffett. In fact, to start the year off in the right direction, you just need to do two little things. And if they work out, you can add a third item to your financial agenda. (If you do want to start budgeting, check out 3 Alternative Budgeting Styles: Which One Suits You?)
- Step 1: Spend Less
Frugal living and budget-conscious spending are proven techniques when it comes to getting your financial situation under control. That noted, the challenge of making a major lifestyle change in terms of spending and diving in to a spreadsheet to track your money is about as difficult for some people as giving up smoking cold turkey.
A much more manageable approach is to take 10 seconds to think about your spending habits. Do you spend every weekend at the mall buying clothes that you never wear? Do you eat out five nights a week? Do you buy coffee every day or play the lottery every night? Identify the most common ways you part with your cash, and then cut back just a little. Make one less trip to the mall every month, or one less visit to the lottery ticket counter.
That's it. No heartache. No major sacrifices. Just one little step in the right direction.
- Step 2: Save More
Saving and investing are complicated topics. Following the prices of stocks and bonds and figuring out the mechanics of mutual funds just aren't the way some of us want to spend our free time. We know that we should save more, but can't spare the time or energy to put effort into something so boring and frustrating.
Fair enough. Everyone has different tastes. Some like to watch television and others like to sky dive. So don't sacrifice your quality time following the movements of the Dow Jones Industrial Average or learning the nuances of technical charting. Just take the money you saved in step one and put it in your checking account. (Learn about pain-free saving in Save Without Sacrifice.)
It won't make you rich, but it won't hurt your bottom line either. After a few weeks or months, you just may have enough of a balance in that account to open a savings account or invest in certificates of deposit.
Simple, unsophisticated, not time consuming and another step in the right direction. It doesn't get much easier.
- Step 3: Take It to the Next Level
OK, so you've make it through steps one and two - or maybe you've been ready for step three for years, but just haven't taken the plunge. Now's the time. With just a few clicks of the mouse, you can have a wealth of information about saving and investing at your fingertips. Read a few articles about simple strategies for budgeting, how to pick a good mutual fund, or how to find solid financial advice.
You can put in the time to become a guru yourself or learn just enough to identify the right experts to whom you can delegate the tasks you would rather not do on your own. It takes just a little bit of effort. Go ahead. Give it a try.