August 14 is National Financial Awareness Day and while your finances may not be something you enjoy spending time thinking about, they become much less stressful when you do.
Taking time to address your finances and establish a plan to get them on track may seem daunting at first, but David Ragland, IRC Wealth CEO, shares three simple things you can start doing to become more financially aware and build wealth.
1.) Review Your Spending
- Where is your money going each month? If you aren't aware of your spending patterns it becomes more difficult to identify areas that are pulling you away from your goals.
- Once a month, pull the last 30 days of transactions and review your spending. Evaluate your purchases on a more conscious level and identify where your money is going and why.
2.) List & Assign Debts
- Make a list of all your debts and assign interest rates to each. You can use this information to help determine which debt may be most beneficial to tackle first as you prepare a plan for debt elimination.
- There are other ways you may decide to go about eliminating debt, but it all starts with tracking it somewhere so you can figure out a path towards financial freedom.
3.) Set Reasonable Financial Goals
- If you set goals that are too lofty they will become overwhelming and you will be more likely to avoid and abandon them.
- Make sure your financial goals are reasonable and attainable– You can always add on and build them up over time as things change! If your goals are realistic and you keep them simple you will be more likely to succeed in them.
- For example, if you spend $5 on a cup of coffee every morning, consider cutting down to two or three times a week and placing the excess cash into your savings. Rather than give up something completely or set yourself up to fail by implementing a drastic change, easing into a new habit and taking small steps towards the big picture (in this case, building up your savings for retirement) helps to keep you motivated and stay on track to achieve your goals in the long run.
Ready to build better financial awareness? Download our free Financial Planning Worksheets to get started tracking your personal balance, personal budget, and debt summary!