How to Stick to Your Financial Plan

How to Stick to Your Financial Plan

If you’ve already created your financial plan, you know that it takes quite a bit of work to determine your objectives, a budget, and the overall roadmap to help you achieve your short and long-term goals. If you’ve put your plan into motion and are

Published Friday, May 1, 2015

If you’ve already created your financial plan, you know that it takes quite a bit of work to determine your objectives, a budget, and the overall roadmap to help you achieve your short and long-term goals. If you’ve put your plan into motion and are working it, then you also know how difficult it can be to stick to it day in and day out.

But sticking to your financial plan is the key to making it work now and as you go through your life and prepare for retirement. Just like any other life-changing decision, you’ll find that a strong commitment, unrelenting discipline, and a clear focus on the big picture will work in your favor as you strive to stay on course. Here are some additional tips that will make it easier to stick to your financial plan:

 

Steer clear of debt.

Debt has a way of derailing the best-laid financial plans. The biggest problem with debt is that the repaying of it eats up so much more money than you originally spent. This is especially the case with credit card debt. Unless you pay your statement balance off every month, the interest rates will have an extremely negative impact on your ability to save more money. While some debt cannot be avoided, such as emergencies, medical problems or loss of a job, most cases of accumulating debt arise from a lack of control when it comes to spending. If you have debt, focus on getting it paid off as quickly as possible so you can move forward with saving instead of getting sidetracked with high interest payments.

 

Live below your means.

Unless you’re independently wealthy or you have a huge money tree growing in your backyard, you’re going to have to make sacrifices when it comes to saving money. Remember the big picture, the long-term goals you’ve set, and then choose to live a lifestyle that costs you less to maintain than you actually earn. That doesn’t mean you can’t take a vacation or buy something you really want from time to time but make sure you plan for it and save for it. And make sure, when you do splurge, that it’s on something that you really want and not just on an impulse purchase.

 

Cut out the right expenses.

When you look at what expenses you can cut out of your monthly budget to save more money, be sure to look more at the luxuries than the necessities. For example, don’t cut back on auto, health or home insurance. Falling short with insurance coverage can reek havoc on your savings account should something go wrong. Instead, consider cutbacks such as cable television (who really needs 500 channels?) and other types of entertainment expenses. You also might give up dining out and that pricey morning latte for home-cooked meals and a reliable coffee maker right in your own kitchen.

 

Be prepared for setbacks.

Life happens. Unfortunately, it can be costly when it throws a wrench in your savings plan. The positive thing to remember is that, with a solid plan in action, you have the money to cover those unexpected setbacks. You may have to dip into your savings temporarily but if you can avoid getting into debt during the difficult times, you’ll find it much easier to get back to your plan once the crisis is over.

 

Stay focused.

Wherever you are in the life of your financial plan, stay focused on the long haul. Don’t get discouraged if you hit a temporary rough patch and can’t save as much as you’d like. Just get back on the road as quickly as possible and keep moving forward from there. Easier said than done sometimes but remember what American Humorist, Evan Esar said: “The mint makes it first, it’s up to you to make it last.”

For more tips on how to stick to your financial plan, click on the following links:

http://nbr.com/2014/01/14/sticking-to-your-financial-resolutions/

http://helpsavemydollars.com/stick-with-your-financial-plan/

https://www.mint.com/financial-goals/personal-finance-guide-to-setting-goals-and-sticking-to-them

http://www.investopedia.com/financial-edge/1011/how-to-make-yourself-stick-to-your-budget.aspx

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