Welcome back to our continuing series, The 10 Beliefs. We’ve outlined the seven most common mistakes we see people make in planning and saving for retirement. In our last post, the eighth belief, we shared why talking you shouldn't follow investment fads. Only two beliefs to go! Next up, the ninth belief, you need to know where you money goes.
If you missed a post, or would like to start at the beginning, scroll to the bottom of this post for a complete listing.
This may seem familiar. We touched on this in Mistake #7 - Turning a Blind Eye. Do you have control over your money? For many, the answer is no.
Maybe they're put off by the word "budget." Or perhaps they're afraid to take a closer look.
But control means more than just creating a budget. It's spending money on professionals to help you as well as being completely aware of where every penny goes.
We hear a lot about how you need to save money. About tightening our belts and not overspending. But most people don’t talk about getting control over our money. That means spending, saving, and everything in between. Instead of getting that control, too many people don’t know exactly where they stand financially.
But it’s not our fault. They just don’t teach this in school. And let’s face it, a budget sounds about as fun as a root canal. But control is about more than budgeting. Here are two tips things to get you started.
1. Sometimes you need to spend money. You wouldn’t care for a broken leg at home. You go to the doctor. Sure it might seem a little expensive at first—what with x-rays and the hospital visit. BUT, what would it cost you NOT to go? You could get an infection, blood poisoning, and who knows-what-else.
Similarly, when need a Will, or Estate Planning done, leave that to the experts. Just like the comfort and reassurance of hiring an investment manager makes it well worth the cost—especially when you figure studies have SHOWN that you make more than you end up spending!
2. Know where it goes. If you lose your TV remote or your keys, you don’t just go, “Oh, well.” You look for it. You check the couch cushions and check under the bed.
You spend time and energy searching for these things because it’s important to know where they are. So why do so many people not have a budget? Why have so many just go “Oh, well,” when it comes to knowing exactly where they’re money is going? If missing your keys, or the TV remote causes considerable frustration, shouldn’t not knowing where your money is going be worse?
We believe it's important to know where every penny of your money goes, both saving and spending. We use a Personal Financial Website to help our clients get control over their finances.