Personal Finance Ology

I find it imperative to talk about the decision making process when speaking on personal finance. I’ve noticed with my past experiences and the experiences of most of those that come to me for advice that the bulk of our financial troubles start from the types of decisions we make with our money.

An important note I always make is if we are choosing to instantly spend money for immediate gratification then it is probably not the best idea. Think about the results of your choosing instant gratification. What was the outcome? Were there any benefits? Were there any regrets? Usually we find ourselves at a loss after the gratification has swiftly passed.

As with anything if it is worth thinking about and planning that means it will in turn bring about a lasting result do to our diligent research. However, anything that we instantly jump into with any thought but just the need to satisfy our hunger, we usually only get that…a satisfied hunger for the thrill but no financial gain.

Due to the importance of this topic I have decided to dedicate a few posts to making smart decisions and the process that goes along with responsible and profitable decision making.

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With the New Year here there’s an inevitable force to make a plan to budget our money with a plan to not run out this year. I must say I couldn’t disagree with this idea more. When we budget our money we are depriving ourselves of utilizing that which we have worked so hard for.
Chart Your Spending

My resolution to this problem is to correctly allocate funds. The correct way to do this is to first chart your spending.  Make it a point to keep receipts of EVERYTHING you buy. At the end of the month write down what you bought and how much you spent on each item.
By doing this you will be creating a visual of your spending habits. This way you can see where you are spending money frivolously and make it a point to allocate those funds to a better cause.

Allocating Funds
With a clearer vision of where your money is going you can now create a new path to spending. You can make a valiant effort to use your money wisely to reach your long-term goal rather than using it to gain instant gratification.
When you use the method of funds allocation it is easier to follow because you feel you are working towards your financial goals as opposed to budgeting that makes you feel you are depriving yourself.

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