Although the life we want is free to imagine, it’s expensive to build.
If this is the year you’re determined to get serious about achieving your financial goals, start by getting real about what it’s going to take to get there.
The more aggressive you are in taking the financial steps necessary to afford your dreams, the less likely it is you will have to settle for anything less than what you imagine.
Related: 5 Money Principles You Need to Know
Start with these three steps to refresh your finances this year.
1. Take inventory of your spending.
Track your spending to bring mindfulness to your day-to-day financial habits and identify serious issues like spending more than you make. The practice of writing down your expenses or tracking them through an app allows you to see whether your spending is actually aligned with your stated goals and priorities.
In other words, you’ll be able to see whether you’re spending money on stuff you don’t really care about at the expense of the things you do. It’s far easier to make changes and realign your spending with your goals when you can identify exactly what’s keeping you from reaching them. Stay accountable to those priorities by tracking your financial inflows and outflows daily.
2. Rethink your savings rate.
How much are you saving each month relative to your income? Better yet, calculate your net worth as a percentage of your lifetime earnings: Of all the money that has passed through your hands over the course of your working life, how much of it have you actually kept?
I know this can be a tough number to look at, especially if you’ve had to pay off a lot of student loan debt or you’ve had to deal with costly medical procedures or other circumstances that might have put your net worth into the negative. But taking an honest look at the numbers can offer a valuable perspective—one that can serve as a catalyst for taking ownership of your financial future, and for making budgeting, saving, investing and managing your money true priorities. Moving forward, you will be able to feel like you have something significant to show for all of the years you’ve worked and all of the money you’ve made.
Commit to a concrete increase in your savings rate. Whether it’s a 1 percent or a 50 percent increase, calculating what those added savings will afford you can serve as powerful motivation for maintaining a higher savings rate in the long run.
3. Refresh your social circle.
It’s hard to grow into the new you while clinging to old relationships that keep you stuck where you are. Build and foster relationships with people who are just as motivated to achieve their financial goals as you are. They’re far more likely to understand and support the path you’re on, and far less likely to guilt-trip or push you into practicing bad financial habits that throw you off course and threaten your commitment to your desired future.
By surrounding yourself with confident and motivated achievers, you’ll maximize your own opportunities to achieve your financial resolutions this year.
This article originally appeared in the February 2018 issue of SUCCESS magazine.