2012 Post #1 was about deciding what you want and Post #2 was about knowing what you spend and your current financial condition. Post #3 will give you some ideas on how to make it happen.

1. Set a budget – it’s easier than you think
2. Integrate your goals
3. Set up a system to achieve your goals
4. Monitor how you’re doing

Budget:

• Note your net monthly income.
• List your expenses.
• Tip: Start with the necessities and the minimum amounts you will start with for discretionary spending (wants) such as entertainment, eating out and gifts. Use the information from past months to check your numbers.

Goals:

• Is your income greater than your expenses? By how much?
• List your goals on your budget (in priority order).
• How much can you put towards each goal on a monthly basis?
• Add these amounts to your budget.

System:

• For savings goals, set up a monthly auto transfer to an investment or other account.
• For debt repayment increase the monthly payment to the amount you can afford.
• Make it easy on yourself: Put your credit card away, lower the limit, use cash or whatever other trick will help you achieve your goals.

Monitor:

• Keep track of your spending, your saving and your debt reduction.
• Check your actual spending against your budget every 3 months or so. If you’re spending more than you planned then figure out why and adjust your spending or your budget as appropriate.
• Note your current balances (savings and debts).
• Note the updated balances on a periodic basis and watch your debts shrink and your savings grow!

It doesn’t take very long to decide on a plan and set up a system to make it happen and track your progress but it’s incredibly rewarding to feel in control of your money and achieve your goals! Good luck! Next post will be a case study.