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The One Sure Fire Way to Fail Miserably in Your Finances

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Ignore Everything!This is a guest post by Cap at StopBuyingCrap.com, where Cap rambles on about personal finance, life, the universe, and everything. If for whatever crazy reason you liked this post, feel free to subscribe to his blog – supposedly you’re guaranteed to at least two worthwhile post per year.

Do you want the quickest way to mountains to debt, poor investment returns, and years after years of tax audits?

Ignore your finances.

Ignore the bills, ignore the secondary notice, ignore the warning signs that your investment allocations are too risky — ignore them all.

Having trouble making your credit card payments? Hey, it’s all good, open a new card account and ignore the old one! Falling short on your mortgage payments? Hey, it’s all good, let’s worry about the upcoming holiday vacations first!

Sounds ridiculous? Probably not.

We’ve all had those moments when we’re too stressed out to deal with the finances; when there’s too many things on the plate and too many other issues to take care of.

Procrastination? Apathy? Lack of proper financial literacy? What the case, there’s one simple solution to avoid failing miserably in taking care of your finances.

Start paying attention!

Here’s some starting steps if you’ve been ignoring parts or all of your finances:

1. Build that workable budget. It’s not impossible to build a budget that you can stick to. Here’s a quick tip: make realistic goals. Don’t try heroic measures like cutting $1,000 per month from the budget unless you’ve drastically changed your financial outlook. If an entire budget overwhelms you, try specific categories you can hit. Build a grocery budget or an entertainment budget, and get whoever else that’s part of the household involved! Need a hand to get started? Try this making a budget guide for some tips and tools.

2. Revisit your investment accounts. Whether it’s your retirement account or the college funding for your child, now’s the perfect time to reassess your asset allocation, risk tolerance, and investment goals. No idea where to start? Try Beginner’s Guide to Asset Allocation and An Intro to 529 Plans.

3. Get a close loved one involved. As with going on raids in WoW, better do the whole financial responsibilty thing with support than going solo (ignore the lame MMO reference). Ask your friends or family member to give you a helpful reminder to take care of specific parts of the finances. Setup a savings goal with a friend, or a debt reduction contest with loved ones. It’s always easier to face life’s challenges when you have the right support.

4. Use the latest tools to keep you updated. Most major financial institutions have online banking capability, with means for you to do automatic bill pays, transfers, and alerts. They can be extremely convenient and time savers. If you’re comfortable with bringing your finances further online, check out online tools such as Mint.com, Quicken Online, and Yodlee. Many of these services provide text based alerts for budgets, bills, and changes to your investment accounts — all to keep you on your toes.

If you have tips on paying attention to your finances, feel free to share. Take it from someone who has ignored their finances for almost a year and paid dearly for it — don’t do it! Make some time for your future, just a few days out of the month can go a long way towards financial stability and independence!

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5 Responses to “The One Sure Fire Way to Fail Miserably in Your Finances”

  1. It may seem like sarcastic points that were made, but the truth is that many people do think that by ignoring the problem it will go away. The reality is that many do not possess the discipline or the tools necessary to budget or keep on top of their finances.

    It seems that everyone complains about finances yet a majority want to put of the work of getting their financial house in order. I think Forget New Years, Start Making Your Financial Resolutions Today explains an easier approach as opposed to waiting for a specific point in time to decide to take action.

  2. Just a quick round of applause for Tip 1, which is one of the biggest ways in which I think people tend to fail at budget making. Thrive’s automatic budget sets very conservative goals for just this reason: most first-time budget makers overshoot and create a budget that they can do for about three months, before they throw up their hands and give up.

    A big part of this is actually breakage, which is something that occurs in other realms like dieting as well. It turns out that as soon as people “break” their budget, they abandon it entirely for that budgetary period. So if you give someone some chocolate first thing in the morning, they give up on their diet for the day because it is “ruined” and binge on whatever they want. Same thing with budgets: people cave and overspend, and then as soon as they are over budget, they just keep on spending because it no longer matters.

    A dollar is a dollar is a dollar. Don’t let your budget break and you’ll be much more likely to stick with it.

  3. Rich says:

    I completely agree with the idea of budgeting specific categories individually to get started. The idea of controlling everything at once is probably overwhelming for most. I think controlling eating out and entertainment expenses is probably the easiest place to start.

    Great post!

  4. T says:

    Regarding going solo vs. having group support, just be sure that Leeroy Jenkins isn’t on your finance-fixing team. :)

    …Hey, you mention WoW, someone has to bring it up.

  5. Chelsea says:

    I like your idea: “Get a close loved one involved.” Recently, I convinced a co-worker to pack her lunch with me. I call her my “no spend buddy.” I find that in the workplace, it is especially helpful to have someone to keep you in check on those extra coffees or lunches!

    - Chelsea, Quicken Online


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