CONNECTING THE DOTS – Homebuyers are Short on Cash $$ – #mikemartins #NOmoney #paydayloans

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They Don’t Have Clearly Defined Financial Goals
Financial goals are the starting point for every action you take make with your money. In other words, when you set financial goals, you are guiding your future financial decisions. They give you a financial direction, and a sense of purpose. Additionally, without them, your financial life will lack accountability.

For example, if you decide you want to save $10,000 this year, you have to measure every spending decision you make between now and then against the following question: will this help or hinder my efforts to save $10,000?
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Honestly, a simple question like that can be the difference between impulse spending and frugal living. In fact, I would go as far to say that little questions like that can be the difference between being broke or wealthy.

Quick Tips For Setting Financial Goals
If you don’t want to be broke, the very first thing you should do is set financial goals. I recommend setting at least two achievement goals and two habit goals. But if you don’t know what those are, let me explain.

Achievement goals are goals that have an end point. In personal finance, they are almost always tied to a specific dollar amount. Whether you want to save $10,000 (like our earlier example), pay off all your debt, or save for a down payment on a house, these goals have a finish line; a moment when you actually achieve your goal.

Habit goals, on the other hand, do not have a finish line. They are ongoing, so the goal is consistency. A good example of a habit goal would be to invest 15% of your income every time you get paid.

Now, I will admit that habit goals are a little less exciting than achievement goals, which makes them harder to maintain. So, I recommend you pair them with an achievement goal. For example, if you set an achievement goal to invest $5,500 in a Roth IRA this year, you could pair it with a habit goal like, invest at least 20% of my income in retirement whenever I get paid. The habit goal is ongoing, but it will supplement your achievement goal.

Good Examples of financial achievement goals:

Save enough to pay cash for my next car
Get out of credit card debt
Pay off my house
Save enough money for a vacation in 6 months
Good Examples of financial habit goals:

Tithe 10% of my income
Invest at least 10% of my income (not including retirement) whenever I get paid
Read at least one book on personal finance every quarter
Log my expenses into my spending tracker every night
Have a weekly financial meeting with my spouse
They Don’t Have A Budget
One of the main reasons most people are broke, is because they don’t live on a budget. In fact, according to a recent study by U.S. Bank, only 41% of Americans stick to a budget. And without a budget, how are you supposed to know when you are getting off track in your finances?

Budgeting allows you to plan, track and analyze your spending habits. It is your well-paved path to your financial goals.

They Don’t Track Their Spending
Part of the reason most people are broke is that they don’t track their spending. But that defeats the entire purpose of a budget. If you don’t track your spending it’s easy for money to slip through your fingers. Then, before you know it, you’re broke and don’t even know why.

I like to think of tracking your spending like parenting. Little kids have a tendency to wander off, so what do you do as a parent? Keep track of them.

Well, the same goes for your money. If you don’t pay close attention to your spending habits, money has a way of wandering off. Whether it’s at the grocery store, retail stores, or restaurants, you need to keep track of your spending. Otherwise, you will find yourself wondering what happened to all that money you had.

They Use Too Many Forms Of Payment
The more complexity you add to your finances, the harder personal finance becomes.

If you’ll indulge me for a second, I’d like you to imagine a world with no credit cards, or access to borrowing money. Everybody would have to pay cash for everything they wanted to buy. Can you imagine how simple that would make your finances.

The more loans and credit cards you introduce to your finances, the more complicated everything gets. Before you know it, you’re spending money on six different credit cards with different balances.

Then, in order to pay all of those things, you have to log into separate accounts. And since each account carries a different interest rate, and posts transactions at different intervals, it’s incredibly difficult to know exactly how much money you have, and how much money you owe.

It’s a very messy way to run your finances, and it often leads to terrible spending habits and financial mistakes.

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