Financial Fundamentals: Getting Back to the Basics

By Kelly Hodges
It is January, the hustle and bustle of the holidays is behind us, and a fresh new year greets us with open arms.  This time of year brings with it resolutions and a renewed sense of optimism for all the opportunity that 2012 holds.  Now is the time to reflect on where we’ve been, where we are today, and where we want to be in the future- both from a personal and financial perspective.

This is also a good time of year to do a big picture financial review, to make sure that your practice of financial fundamentals is sound.  What do I mean by financial fundamentals?  These are the things that need to be done right, or everything else falls apart.  It doesn’t matter how successful you are in other areas of your finances, if the basic fundamentals are off than you’re not on the right path to achieving your goals.

The first of the fundamentals is the common sense mantra “spend less than you earn.”  Yes this should go without saying, but it’s amazing how many people lose sight of this basic principal.  The gym membership, frequent meals out, and the need to have the latest greatest gadgets are a few of the many sieves that drain those paychecks as fast as they are deposited in the bank.  No matter how you do the math, your finances will never be in order if more money is going out than coming in every month.   If the numbers aren’t adding up for you, now’s a great time to sit down and figure out why.  Are there expenses that can be cut?  Is there more money that could be earned?  Be creative in your thinking and make it a goal for 2012 to get the balance sheet back in order.

While “spend less than you earn” may be the cornerstone financial fundamental there are others that deserve review as well.  We’ll explore them over the next several posts to ensure that your foundation is strong heading into the new year.

Read Part 2 about Setting Goals the Right Way. 

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Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of her employer or any other person or entity.

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