My Loans Consolidated

A few years ago I lived in Kalimantan, the Indonesian part of Borneo. I went to the bakery one day with a young British friend of mine who just received money from her parents in London. As she had pound sterling, everything in that little bakery seemed so cheap for her. The price ranged something between £0.38 – £0.50 per item. So she started to choose, thought of the family and friends we had there in Borneo and ‘generously’ thought of them when she put everything on a few trays and went to the cashier to pay for it.

When she looked at the bill, her eyes widened because all those £0.38- £0.50 items have added up to a £18 bill. It may still be cheap in London but being here in Indonesia, she didn’t have to spend that much in a bakery. When we walked out of the bakery, she asked herself, “Why did I do that?”

Another New Zealand friend of mine was with me in Jakarta, Indonesia a few years ago and having dollars instead of Rupiahs, he found everything so cheap. He liked shopping a lot and bought just about anything that he liked just because it was “cheap”. When I saw him gazing at a desktop keybord that was so cheap he couldn’t believe it, he asked me if he should buy it. When I asked why he wanted to buy it, he said, “It’s cheap.” Of course I told him what I thought, namely, that it would be even ‘cheaper’ if he didn’t buy it at all.

Mike Dammann once told me that one of his friends in Costa Rica wouldn’t mind spending $400 every night just to party. Even if he had a lot of money, which was not the case, why would people do that?

The impulsive spending habit comes from a mind that does not exactly have any financial priorities in their lives. There is no financial goal to try and achieve. There is no cause to live for. There is just no priority.

A life without financial priority or goals has led many people into debt and financial chaos. If you are bleeding financially, stop and review whether you have a financial goal at all in your life. If not, it is about time to stop your financial bleeding and set your financial priorities and goals.

Here are 10 top things to know how to do so:

1.) Set a narrow objective

You would probably not be able to achieve every financial goal that you dream of but this should not block you from setting your objective. Try and narrow it down. Look at all of your financial goals and try and decide which ones are most important for you, then choose some of them. Focusing your effort only on those objectives will help you reach your goal faster.

2.) Focusing on the most important

Once you have chosen which goal(s) is/ are most important for you, focus on them. Try and accomplish the primary goals and then the less important ones.

3.) Face your conflicts

If you find your goals to conflict with one another, stop and review your goals. Ask yourself which goals would benefit more people in your family and which will cause harm to your life and the lives of your loved ones?

4.) Time is your asset

Besides money, your greatest asset is time. The more time you have to reach your financial goal, the more you will accomplish. So you don’t want to waste your time, instead, put time on your side.

5.) Rank your priorities

Consider taking these goals as your primary goals: your children tuition, emergency fund, getting out of debt. Or if you have other goals that you think are urgent as well, put it up on the list. When your list is done, rank them in order of importance. If you need helpt to do this, go to CNNMoney.com Prioritizer.

6.) Involve your family members

If you have a spouse and children, involve them in the goal-setting process. By this you will make sure that you get all the support you need to accomplish your goal.

7.) Start now

The longer you wait, the more time you will lose. Start now.

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