Do you want to change your money habits?  Like any change, if you try and do it too quickly you will fall flat on your face.

As my mentor David Krueger says, change is not an event, it is a process.  This is a very important concept to bear in mind and keep coming back to.

I see too many people setting themselves up to fail.  For example, you have had a credit card with a balance of $5,000 for the past couple of years.  “That’s it!” you say and decide you are going clear the debt in three months.

Unless you have had a windfall gain, like a bonus or tax refund, it isn’t very likely you are going to achieve that just by cutting out a coffee or two a week.

You are going to have to be really hard on yourself to achieve this.  It will be tough and you probably won’t last the three months.  Then you will feel bad, beat yourself up about being useless at managing your money and getting out of debt.  So you go shopping to cheer yourself up and you are back at square one!  Sound like a familiar story?

It was probably a lot of small decisions that got you into the position you are now.  Use the same process now to make changes.

Before you start doing anything different.  Take a close look at what you are doing now.  What are the small decisions you make every day that impact on your money?

Do you eat out more than you eat at home?  Do you treat everyone when you go out socially? Are your children using you as the bank of Mum and Dad?

By taking a step back you will see quite a few areas of life where you could make small changes to get to where you want to be.

Pick just one of them.  Don’t try to change everything all at once; it is exhausting!

For example, if you eat out four nights a week, cut that back to two or three.  If you were to average out what you spend each time you go out and applied that directly to your credit card; how quickly could you repay the debt?  Even if it took 12 months that is still better than your current position, so stick with it.

What if that just doesn’t work?  Then try something else.  You may not get things right first time round, the key is not to give up, go back to the drawing board and do something else.

Everything we do is to fulfill our needs.  Unmet needs cause frustration. We often use financial strategies to meet needs that could be fulfilled by non-financial strategies.  So, if your strategy isn’t working, look at the underlying need then try a different strategy.

Once you identify the need you are wanting to fulfill, you will be able to adapt your spending more readily to ensure your needs are being met and you’ll have more money in your pocket at the end of the week.

Small decisions add up over time, whether it is the decision to have the chocolate muffin every day and five years later you have gained 10kg, or you buy lots of stuff and have debt.

Make a conscious decision to make small changes in your life and then just get stuck in and do it!

Remember, change is not an event, it is a process.

If you want to know more about why you do what you do with your money, then give us a call, or drop us an email.