Several times in the past, I tried creating a personal budget. During the first weeks, I can see that I was on track. But as the days go by, I treaded away from my budget path. I didn’t know the reason why.
I thought I was strong in my decision to stay low on my expenses and just live within my means. That may have somehow worked but my “dream” to have extra for savings and investment was not happening at all.
One day, I learned why.
It was because I was focused too much on the tool (my budget) that I did not have time to define or set a target (my financial goal).
Upon realizing this, I employed a different strategy.
I set a goal. “By mid-year, I will be able to establish my emergency fund amounting to ___.”
Then I styled a simple strategy. Every pay day, I would set aside an amount for my supposed savings or emergency fund.
I take that amount out from my payroll account and put it in a separate account. Then whatever is left, I would allot it for my living expenses – meals, rent, transportation expenses.
And guess what happened. It worked.
Today, I’d like to encourage you to set a financial goal and focus on it.
Don’t get too attached in a fancy tool that you lose focus on the goal. A tool should be able to help you accomplish your goal. If it’s doing otherwise, change it.
Simplify your strategy. Complicated strategies often times complicate the situation. If you think your budget is just too complicated, trash it!
Try this: When you receive your paycheck, set aside the 30% and what’s left goes for your expenses. That’s it!
Make it easy for you. Register for online banking so you won’t have to queue on a long line every pay day.
Focus on the goal.
Once you accomplished it, set a bigger one and go for it.
Here’s my challenge for you today:
1. Set a goal to establish your emergency fund. Most experts say this should be equal to 6 months expenses. If you already have an emergency fund, proceed to challenge 2.
2. Set a goal to build a base for your investment (for example, stock market investment) as of a certain date. (To help you on this, read my other article Seven Simple Steps to Start and Succeed in Stocks at http://www.chrisdaoanis.com/2013/02/12/seven-simple-steps-to-start-succeed-in-stocks/)
On both of these, make sure you set the amount and the date.
Launch your strategy and stay disciplined.
I pray that you will be able to achieve the goals that you set.
Live your life, young mind!
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