It’s that time of year again. After several weeks of over-indulgence, people are coming to their senses and realizing it’s time to make changes for the better. Some — like me — have decided to improve their relationships with food and exercise. They’ve resolved to eat well, drink less, and move more. Others have decided that 2017 is the year they’ll take charge of their finances.
If you are one of those determined to make this the year you become the boss of your own life (or if you’ve been on that path for a while and simply need a shot in the arm), here’s an overview of seven smart strategies to improve your financial position.
These aren’t just arbitrary suggestions. I’ve been reading and writing about money for more than a decade now. Based on my experience — and based on thousands of conversations with other people — these are seven specific strategies that work.
- Be the boss. Choose to manage your household like a business. Do what you can to increase income and decrease expenses. Try to approach things logically rather than emotionally.
- Have a plan. Begin by getting clear on your purpose. What do you want out of life? If you know what it is you want to accomplish, you can manage your money to support that goal.
- Dedicate time and space to managing your money. You can’t get better at something if you don’t actively strive for improvement. Money is no different.
- Automate everything. Let’s be frank: You are your own worst enemy. (And I am my own worst enemy.) It’s in your best interest to automate good habits.
- Pump up your profit. Here at Money Boss, I preach the power of profit. Nothing is more important to your financial success than the gap between your earning and spending. Nothing.
- Be proactive. Instead of living reactively, take charge of your financial life. Prepare for the future, both the known and the unknown. Be ready for emergencies and be flexible so that you can seize opportunity.
- Practice conscious spending. Don’t spend out of habit. Don’t buy into media hype or try to keep up with your neighbors. Spend on what’s important to you and cut back on everything else.
These seven strategies form the foundation of financial freedom. Do these things and you will master your money. Let’s look at each strategy in more detail.
Be the Boss
Here’s the number-one strategy you can use to improve your financial situation: Manage your household finances as if you were managing a business. Choose to become the Chief Financial Officer of an imaginary business called You, Inc.
Whether you hope to escape the chains of debt, to save for a one-year sabbatical, or to retire within a decade, you can have the financial freedom you desire — if you’re willing to accept the role and responsibilities that arise with becoming CFO of your life. [Read more…]