We've all made a few money mistakes, and if you haven't made any money mistakes yet, you will at some point in your life. These mistakes can set you back financially, but with a plan, you can avoid repeating mistakes and improve your financial future. So, if you're ready for a better 2015, here are seven ways to avoid repeating last year's money mistakes.
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1. Write down Your past Mistakes
To avoid repeating last year's money mistakes, you have to recognize these mistakes. On a sheet of paper, write down every wrong financial move you made last year. This can include anything from accumulating too much credit card debt to not saving enough money. With your mistakes on paper, you're now ready to re-write the pages of your financial story.
2. Set New Goals
What do you hope to accomplish financially this year? For example, if you made the mistake of accumulating too much debt last year, your goal might include paying off your credit card this year. It's important to set goals. Without goals, you might manage your finances aimlessly, which increases the likelihood of repeating last year's mistakes.
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3. Create a Plan to Reach These Goals
It's not enough to set a goal, you need a strategy to make a goal happen. Using the example of paying off debt, brainstorm ways to achieve this. There are several ways to get from under credit card debt, such as increasing minimum payments, negotiating a better interest rate or working longer hours and putting extra income toward debt.
4. Regularly Evaluate Your Progress
You're not going to reach your goals overnight. You need to monitor your progress on a weekly or monthly basis, and track whether you're going in the right direction. Also, it helps to set smaller milestones for yourself. For example, if you want to pay off a $5,000 credit card balance in one year, you might aim to pay off half this debt in six months.
5. Recognize Habits That Can Hinder Your Progress
Unfortunately, several bad money habits can delay reaching your goal. For example, if you don't want to repeat last year's mistake of accumulating credit card debt, you need to avoid situations that encourage spending. Be honest with yourself. Can you handle going into a mall and not spending money? If not, maybe you should avoid retail stores, or leave credit cards at home when shopping.
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6. Recognize People Who Might Hinder Your Progress
Not only should you recognize bad habits that hinder reaching your goal, you need to recognize people who can hinder progress. If you have shopaholics friends or peers who encourage spending, you might limit contact with these individuals, especially if you're shopping for things you actually need. This person might pressure you to spend money you don't have.
7. Believe in Yourself
If you don't believe in yourself, no one else will. If you're committed to avoiding last year's money mistakes, you have to believe that you're able to make progress and stick with the plan you've established for yourself. Fill your mind with positive thoughts, and it helps to write down goals and post them in plain sight.
Everyone makes mistakes, but you can overcome any money mistakes you've made in the past and build a stronger financial foundation. What are other ways to avoid repeating last year's money mistakes?
