Setting goals is key to good money management
If you want the changes you're making to how you deal with your money to stick, you must be able to identify at least one benefit you'll gain by making those changes.
Do you want to save more money so you don't end up poor when you're old?
Do you want to set up an emergency fund so that when life throws you a curveball, you have some options?
Do you want to get out of consumer debt once and for all so you're not worrying about a potential disaster around the corner?
What do you want? What's really, really important to you?
No two people are motivated by the same thing. I like having piles of money in the bank as an emergency fund so that if anyone screws with me and tries to make me compromise my values, I can tell them to take a long walk off a short pier. I can do that with confidence because I've forgone the snappy shoes, the latest gadget and the snazzy appliances to have money in the bank instead. I know what's really important to me.
Do you know what's really important to you?
Grab a pen and piece of paper and write down the things that you consider the most important to you. Don't just write down what you think will make a good list. Be honest about what you want. Write down the things that really matter to you.
What makes you happy? What defines who you are? Where do you wish you were in your life? You may have to come back to your list a few times. Think. Jot notes. Think some more.
The next step is to write down the goals you want to achieve over the next year, two years and five years. What do you want to accomplish? Write down everything you can think of. Everything.
Take your list of goals and rank the items as a one, two or three in terms of importance. Now looking at all your ones, rank them again as a one, two or three. Now you have the things that are most important.
Compare your goals to what's really important to you. If you ended up with "vacation" on the top of your goals list, but "living debt-free" was really, really important to you, you're going to have do some more thinking. Good luck resolving your conflicts!
Gail Vaz-Oxlade's latest book, Money Rules, is published by HarperCollins and will make you say, "Really? I didn't know that!"