Many people set new goals for the New Year…losing weight…stopping smoking…cleaning out closets…but what about your financial goals?

If you set your financial goals, business and personal, and get to work figuring out how to reach those goals, you can improve your financial condition.

Make your goals realistic but make them a bit of a stretch too…after all the point is you need to be able to plan on how you are going to reach the goal. Don’t just pull a number out of thin air and then getting discouraged because there is no way you are going to make it.

One way to start your plan is to work backwards, starting with what you want to achieve.

Wealth can be measured by your net worth, so that is the place to start. Figure out what your personal net worth is right now by adding up the value of all of the assets you own and subtracting everything you owe (mortgage, car loan, credit card debt, etc.) Then set a goal of increasing your net worth by some percentage. Work out what you will pay on the amounts you owe without adding any additional liabilities like paying for things you can’t afford with credit cards, and then add a goal for some cash savings that will increase your net worth. That’s two more goals, spend less and save more.

Actions to increase your net worth:

1 – Pay down the principal on your liabilities like the mortgage or car loans

2 – Pay down credit card debt and stop using the cards unless you can pay off the balance in full when you get the monthly statement.

3 – Find ways to cut expenses – we all spend on items that are optional, right?

4 – Put a portion of every paycheck into cash savings toward an emergency fund (set a goal for the amount you want to reach in that fund)

5 – Once your emergency fund is built up, start putting some cash into investments that will grow (don’t overlook the benefits of a retirement savings plan account which can also reduce your income tax liability)

Next step: How much more personal income will you need to achieve that increase in net worth and pay all of the bills you will incur during the year? That number is the basis for setting the goal for an increase in your personal income. If you are earning $60,000 a year now, and you will need to earn $70,000 to make the net worth goal, then figure out what you have to do to make that happen.

The actions you take will differ based on whether you are a business owner or an employee, of course.

If you work for someone else, then the assets you have to sell to increase your income are skills and time. You can increase your skills and make yourself more valuable to your current company and ask to take on more responsibility for more pay. Or, you can get a second job or start your own money-making entrepreneurial activity that you can work on in your spare time.

Don’t overlook cutting back on discretionary expenses. You can save money on restaurant meals when you dine out by buying gift certificates for your own use for a fraction of their worth at http://tinyurl.com/restaurant-gift-certs-4-less and they make great gifts for giving to others.

As a business owner, your increased personal income demand is placed on your business. That means working out a plan to generate more sales and cut expenses wherever possible to pay you a salary increase and cover the increase of the cost of doing business in the coming year.

So, working backwards in the equation, how much of an increase in sales do you need to make that goal? How can you use your cash flow more effectively to generate more cash? Where can you cut expenses without harming the income production and profits of your business?

Becoming financially fit is not all that different from becoming physically fit. You start where you are and train yourself to use discipline and your brain power to perform better and make small, consistent improvements every day. Before you know it, you’re on your way to achieving your financial goals for the new year and better money management habits become second nature.

Money Saving Tips:

Save money on restaurant meals;  buy gift certificates for a fraction of their worth

Lose the fax phone line: Send and receive secure faxes by email and never miss another fax

Buy ink and toner at deep discounts and opt-in to receive the additional coupons by email to save an additional 10 – 15%

Buy shipping supplies at good prices and get cool FREE stuff for yourself or gift giving

Automatically protect your computer files for pennies a day

Do you have other great money saving ideas? Leave a comment and share them with our readers.

There is only one thing that separates you from the people who have the money you wish you had. It is not talent, skill, the things you own or the connections you have. It is the MINDSET.

What do I mean about mindset? The way you use money immediately tells me if you are a Gratification Groupie or a Genius. Here is how I define those terms.

Gratification Groupie – Overspending is a habit and money runs through your hands as fast as it arrives buying ‘stuff’ that you want but do not actually need. You think it is important to impress others with the material things you own. You follow the crowd and do what they do – shop, shop, shop, spend, spend, spend. You may give the appearance of having money, but you are drowning in debt that you cannot pay off. You look for ways to spend money, and spend time thinking about things you want to buy instead of taking action to get out of debt and invest in your long-term financial survival. You are constantly worried about money.

Genius – Paying yourself first by investing a portion of every dime that comes in the door for your long-term financial security is your top priority. You spend the rest in ways that can help you produce more income for your financial survival. You set money aside over time to buy the things you need, and you pay cash. Credit cards are seldom used, and are paid off as soon as the statement arrives. You do not use your money to buy things to impress others or win popularity. You are never worried about money.

What separates millionaires from normal people? Not much. The only real difference is what they do with money when it comes in.

You see, It is not how much money you make, it is what you do with it that determines your financial condition. There is a simple science to managing your finances the right way. Very rich people know this science.

If you really want to convert from being a Gratification Groupie to a wealthy Genius and get on the road to winning your financial freedom, here is the formula the Genius uses to manage the money when they receive it:

1 – Put a minimum of 10% into a retirement savings plan for long-term financial survival. Increase this percentage over time.

2 – Pay cash for everything, starting today. Stop buying on credit.

3 – Use a minimum of 15% of your income to pay off debt and past due bills.

4 – Pay your current bills for necessary operating expenses like rent, utilities, and telephone.

5 – Make your spending decisions based on NEED rather than WANT. Buy the things you need that contribute to your ability to produce more income. Buy used instead of new. Most items lose 25% to 80% of their value the instant you pay for them.

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Sandra Simmons, President of Money Management Solutions, Inc. specializes in helping people manage their money to achieve financial freedom. Claim your FREE Debt Reduction Solutions Guide

© 2008 Sandra S. Simmons. All Rights Reserved.

You know your business money management plan should include a retirement savings plan for your financial security. Here’s how to start one FAST!

The old saying, Pay Yourself First, is some of the best business money management advice you will ever get. If you don’t pay you into a retirement savings plan, who will? How do you do that? Here’s how.

Your Business Money Management Planning Should Include A Savings Plan

Out of every bit of income that comes in the door, immediately carve off 10% and put it in a savings account that you have designated for your long-term wealth building plan. I know that is a scary idea for a lot of business owners who have debt and past due bills to pay. My advice? JUST DO IT! As the weeks and months go by you’ll find you have adjusted to operating on 90% of your income.

The biggest benefit of this self imposed retirement savings plan is the financial security and peace of mind it gives you just knowing that cash is there. You will find that you actually stop worrying about money.

Think you cannot possibly put away the whole 10% to start with? Then take a look at your business money management plan from this point of view. Look at all of the suppliers you pay out of your income every month and get the idea that these suppliers are all on your personal payroll. Is there anyone you can fire and not really miss? Is there anyone you can cut back from full time to part time status? Just look at the bills that come in every month, or those checks, debits and automatic fees deducted from your accounts and you’ll see exactly who is on your “payroll”.

Here is an example. I was working with a business owner who was having a hard time cutting expenses 10% to put away in his retirement savings plan. We looked at every expense from the viewpoint that the supplier was on his business“ payroll”.

Playing The Business Money Management Wealth Building Game

Suddenly we were playing a game of shopping for alternative suppliers for things like telephone services, internet services, web hosting services, and credit card merchant services. We reduced the “pay” of some of the local service providers. We “fired” others and replaced them with less expensive, high quality services that didn’t hold him hostage with lengthy, punitive contracts. That saved a lot of money every month. He cut the phone company’s pay by getting rid of his dedicated fax line and got him a very low cost internet based fax service. We even fired his bank and got a new one with no monthly account charges and got the old bank off his payroll to the tune of $25 a month.

You can make this a fun wealth building game with your business cash flow and with your personal finances just by changing your viewpoint. Be the Donald Trump of your own organization. Take a hard look at who you are paying out of your hard earned income. Don’t be afraid to say “You’re Fired!” and change your business money management plan to pay yourself first by putting that money in your own retirement savings plan.

Leave a comment and tell us where you discovered you could save some money to put towards gaining your financial freedom.

P.S. Don’t forget to claim your FREE Formula To Increased Business Profits Report