Small steps toward bigger rewards

Try taking baby steps instead. If you want to change big behaviours, you have to break them down into smaller, more measurable ones. Here are some starter moves:

Set your priorities
Have a family meeting and discuss, in general terms, what you want your money to do for you. Paying off the credit cards a priority? Gathering a down payment? Know what you're aiming for. Having a specific goal in mind will help you make everyday decisions.

Learn to use financial management software
You can buy a program like Quicken or Microsoft Money, search for an online budgeting tool or even just use Microsoft Office Excel. Try a few, and see which one you like the best. Give yourself time to learn it. The better you get at recording your financial life, the better you'll be about managing it.

Prioritise your debts
This is a one-hour exercise. Make a list of everything you owe, the interest rates you're paying and any other factors, such as tax deductibility. Put them in the order you want to pay them off, with high credit card debt at the top of the list and low-interest mortgage debt at the bottom. All year long, pay extra (as much as you can afford) to whittle down the debt at the top of the list.

Learn about investing
Try to learn something new as often as you can, whether you know nothing or a lot. If you're socially inclined, form an educational investing club with friends. If you're more of a do-it-yourselfer, just start reading.

Update your homeowner's insurance
If you haven't done this recently, call the company or agent that handles your homeowner's insurance. There's a good chance that it's insufficient. Find out how much coverage you need now to replace your home in the event of a fire, flood or another catastrophe.

Save automatically
Authorise a monthly deposit from your main account into a savings or investment account. You'll not miss the money and it will build up without you having to make any more decisions. In some future year, when you're facing a college tuition bill or a wedding, or a leaking roof, you'll be glad you did.

Get a better credit card
Do some research to see if there's a lower-rate or better rewards card out there than the one you're using.

Give up one thing
The afternoon latte? The movies you buy instead of rent? The theatre subscription, or the kitchen gadgets you can't resist buying every time you go shopping? Look at your spending behaviour and choose one particular weakness. Write it down and decide where you're going to put the money instead. Don't attempt to live the life of a monk, but forgo one personal luxury every day or week, and send the money to your rainy day fund.

Watch your balances grow, and you'll discover this secret: Saving is just as addictive as spending.

Do you have a fail-proof savings plan that you go by? Let us know in the comment box below.