Without a financial goal, you may find yourself living paycheck to paycheck and being broke all the time. You may tell yourself each month that next month will be different, but it never is. You may have even decided that it is too late to do anything about your future now. You would be wrong! Until you are dead, it is not too late to do something about planning for your financial future.
You need to start with a financial goal. The most effective way to reach your financial goals is to pay yourself first. When you sit down to plan your budget and pay your bills, the first payment you need to make is to yourself. Look objectively at your income and your necessary bills. Plan a budget that you can stick to for at least six months. Now, take the money you have set aside for you and immediately put it into your retirement account, brokerage account, or mutual fund. You must do this, even if you cannot afford it.
At this point you may be thinking this is not practical. However, it is important for your future. Unless you plan to have little or nothing to live off of in your retirement years, you must start paying yourself first! When you first begin to use this method you may find that you do not have enough money to stretch for the whole month. You will need to find some creative ways to earn more money such as selling some items, gathering up aluminum cans and turning them in for cash, or cutting costs wherever possible such as turning off your cable, canceling your magazine subscriptions, or changing your phone plans to a lower monthly plan.
You need to consider this as any other bill. You cannot miss a payment or short yourself. Once you make that mistake the first time you will begin a cycle that will eventually lead to you not putting any money aside. What is more important, the “extras” you have now or financial freedom in your future?