The same is true for your personal finances.
Do you wish you had more money saved? Do you wish you didn’t have any debt? Do you wish you could achieve specific goals like a vacation or starting a business, but can’t seem to get there?
Take a moment to think about what is most important to you.
Now, what small actions have you taken that kept you from achieving these goals?
What different small actions could you have taken that would have helped you achieve your dreams?
It is those positive small actions that will get you towards those financial goals.
And the power of time.
The way you improve your fortunes is to take small positive steps. Just save a bit more every month. Nothing drastic. Just a little bit more than you’ve been doing.
The same goes for debt. Just pay a little bit more every month.
That little bit extra for one month doesn’t make a huge difference. But over 12 months you’ll notice a massive improvement with your finances.
You see, saving a bit extra every month means there is a little bit of extra money that can be invested to work for you. It is the power of compounding. Every little bit extra that is saved can earn a bit more money. This will magnify over time and work in your favour.
Debt works the same way. Paying a little bit more means the next month you pay less in interest, allowing your next month’s payment to pay more off the debt. These payments compound to help you pay off your debts much faster.
Time is now working for you rather than against you.
Look, I know I am probably not telling you anything you don’t already know about money. I’m sure if you could pay more off your debts or save a bit more you would be doing it.
I get it.
But I wanted to remind you that this doesn’t have to be complicated and that there is not one magical step that will get you where you want to be financially. It will take many small steps.
Now, to give you a boost and to help you change your habits, I want to make you aware of the opportunity to use money you already earn towards these goals.
You see, everyone one, myself included, spends money on a whim that could be used to improve our overall finances.
I call this The Financial Black Hole.
It is the money that is spent, usually based on an emotional decision that makes very little impact on your life.
In fact, you will likely completely forget what you spent your money on within 24 hours.
Now, it is impossible to destroy The Financial Black Hole completely, but it is very possible to shrink it down dramatically.
It just takes learning to control those small negative spending decisions. The method that works best for me and those I help with cash flow planning is a Weekly Spending Allowance. Naturally, by cutting out those negative spending decisions you now have extra money that can go towards saving for retirement, vacations, a car, starting a business or any other dream you have.
It can also go to eliminating your debt faster.
With the power of time and controlling your Financial Black Hole, you’ll have more money than you ever thought was possible.
It just takes small steps. And time.
David Field is a financial advisor and a Cash Flow expert in Oakville, Ontario with expertise helping professionals and families better utilize the money they earn to fuel their goals.