Turn your money "shoulds" into action

You know you "should" start saving money or planning for your retirement, but it can be difficult to translate the thought into action. Get tips on how to take the first step.

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When was the last time you rocked a "should"? As in,

"I should replace that burned out light bulb."

"I should exercise more often and eat better."

"I should make the time to get a handle on my money life."

We are all full of the "shoulds". They plague our existence with a daily dose of guilt and dissatisfaction.

"Must" however, is full of strength and determination. It’s a there’s-no-choice-here word. "I MUST take out the garbage" vs. "I should take out the garbage". Livable home vs rat-infested disease and squalor. Quite a difference.

So how do you make that transition from the lazy-would-be-nice-if "should" and the powerful, can-do laser-focused MUST with your money?  Start with the declaration of your choice.  For example, "I must get out of debt" or "I must increase my financial literacy" or "I must spend less and save more for retirement/college/house down payment." Pick the one that rings truest for you.

  1. Articulate your MUST and talk it over with your partner, spouse or significant other(s) who are impacted. Make sure their voices are heard.
  2. Answer the WHY question. Why is this a MUST? What happens if it doesn’t happen? If it’s changing a light bulb, your biggest downside is being in the dark. If it’s your retirement or getting out of debt, the stakes are a bit higher, wouldn’t you say?
  3. Write it down.
  4. What needs fixing or changing? Determine what the problem really is. It could be your spending habits, or maybe you need to look for a new job or even a second job temporarily to move the needle. Perhaps you are overwhelmed with debt and you don’t know how to fix the problem. Or you’re a wiz at building savings, but have no idea how to invest to meet your goals.
  5. Who can help you make the change? Is the right person a Fee-only Financial Planner or do you need to take an adult learning course in financial management? Knowing who the experts are is more than seeing designations after their name. There are stockbrokers and insurance salespeople who are Certified Financial Planners(TM), but that designation means only that they’ve passed the requisite exams and take continuing education. Make sure you find professionals who can actually help without a sales agenda.
  6. Creating change is all about courage, commitment and consistency, which are best accomplished in a step-by-step approach. So before you sell your house and move into a tent to save money, examine where you can make cuts to discretionary expenses. Here’s a hint: no one needs 500 cable channels. You don’t need a $250 deductible on your car insurance if you have enough savings to cover the deductible. And you don’t have to eat out seven days a week if you have more pressing uses for your money.
  7. Set up a process that supports your decisions. For example, if you cut your expenses by $100, you actually need to do something with the savings. And it needs to happen pretty easily or you won’t do it—set up automatic savings or investment plans that make it simple.
  8. Chart your progress. If your goal is to pay down debt, then create a spreadsheet where you can chart your progress each week. The same applies for savings or other goals. It’s like stepping on the scale and seeing that you lost weight—each small success builds on itself.
  9. Keep your stakeholders (spouse, partner, significant other(s), etc.) involved in the process and progress.

By making strong decisive steps to move from "should" to "must", you shift your beliefs about yourself and what you can accomplish. It is no small feat, but it’s well worth the steps necessary to take control of your financial life. Think about it—you really should.

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This article was written by Michael F. Kay from Forbes and was licensed as an article reprint. Article copyright July 28, 2015 by Forbes.
The statements and opinions expressed in this article are those of the author. Fidelity Investments cannot guarantee the accuracy or completeness of any statements or data.
This reprint is supplied by Fidelity Brokerage Services LLC, Member NYSE, SIPC.
The third party provider of the reprint permission and Fidelity Investments are independent entities and not legally affiliated.
The images, graphs, tools, and videos are for illustrative purposes only.
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