We all know how difficult it is to develop a budget and stick to it.
Pay Yourself Last
If there is money left at the end of the month, then use it to fund your retirement. If not, better luck next month! Obviously, there will never be any money left at the end of the month using this technique. A better way is to pay yourself first by deciding on a fixed percentage of your income to dedicate to your savings plan and having this money deducted from your account on payday.
Use the got Money, spend Money Approach
Many people use the got money, lets spend it approach to financial planning. Is there any money in your wallet? Better spend it! Order a pizza, go out for the evening, do whatever you can to spend it as fast as you can! A better way is to develop a budget that meets all of your financial objectives and maximizing your enjoyment of your income. That way you will be used to having money around and knowing that just because it is around does not mean it is not needed for an important purpose down the road.
Develop some Expensive Habits
Why make coffee at home when you can buy it for $3 a cup on the way to work? Why make your lunch at home when you can buy it for $10 a day in the restaurant down the street? After a while, habits like these will eat away at your disposable income. It is easy to spend $15 to $25 a day on little habits that add up to a big financial cost. A better way is to develop habits that will save your money. Make your lunch at home!
Worry what other People will Think
What would people think if I drove an ordinary car instead of my gas-guzzling SUV? What would people think if I wore clothes that were not designer label? Oh my! Thoughts like this lead many people to a depleted savings account and delayed retirement. Instead, dont worry what other people will think, worry about the state of your savings account!
Dont Think Ahead
Property taxes due every April 30th? Christmas comes every December 25th? Dont worry, no need to plan for these events, just wait until the last minute and maybe there will be some room on a credit card. A better way would be to plan ahead, and to set aside funds for these events well in advance. Open a savings account, and have a small amount transferred to it every payday. That way you will be ahead of the game next time.
