If your finances have been controlling you, rather than you controlling them, it may be time for a money cleanse. Time to take charge of your finances, create a spending plan that you can live with, and learn to live within your means. By undertaking this money cleanse, you can substantially change the way you interact with money, feel better about your financial situation, and potentially meet your financial goals.

Day One: Define Your Financial Goals

Financial goals are often among the hardest to meet. Whether you’re hoping to create a great retirement account or saving for an incredible vacation, it can be easy to “cheat” a little on your long-term financial goals in order to experience short-term happiness. On day one of your financial cleanse, take the time to define your financial goals. This could include everything from building a $10,000 emergency fund over the next six months to building a nest egg of $2 million for retirement in 30 years.

Day Two: Track Your Spending

Take the time to sit down with the last twelve months of debit and credit card statements and track where your money is really going. If you prefer to use cash on a regular basis, it may be more helpful to write down your purchases over the course of the week, then do an end-of-week review. Make sure you account for every dollar spent. If you buy coffee on your way to work each day, make sure it appears on your list. Although you may not remember exactly what was purchased at Target or Costco, be sure to account for the spending in a Miscellaneous category. Be honest with yourself about where your money is actually being spent.

Day Three: Erase Unnecessary Recurring Expenses

After you have defined your financial goals and analyzed your spending, you can then eliminate any unnecessary expenses. Have you purchased a subscription box that comes in the mail every month with products that you don’t actually use? Do you have a gym membership, but only make it to the gym once or twice a year? What about your television viewing: are you paying every month for several overlapping services? Spend some time canceling programs that you never or rarely use. Chances are, you won’t even miss them!

Day Four: Define Your Money Treats

Whether you decide to spend extra money on a nice dinner or concert tickets, it’s okay to treat yourself once in a while. Even the strictest spending plan should incorporate some fun. Whatever it is that helps you stay on track with your everyday finances, make sure you define the ways you want to “treat” yourself. Does a manicure, massage or sporting event make you feel rejuvenated?  Is international travel a top priority at this stage in life? Once you have defined how you want to treat yourself, you may find that it’s easier to skip less important money splurges and save for ones that really matter to you.

Day Five: Examine Your Income

Be honest with yourself about what you’re really making. Many Americans today find themselves living in debt because their lifestyle exceeds their means. If your income isn’t in line with the lifestyle you’d like to lead and you find yourself constantly reaching for your credit card or relying on your emergency savings to get by, it’s time for a change! It is easy to forget to account for the surprise expenses, such as car repairs, home maintenance, or out of pocket medical expenses. If you build these items into your budget, they are less likely to take you by surprise. If your income doesn’t meet your goals, you need to either boost your income or reduce your lifestyle.

Day Six: Check Your Necessary Expenses

Some expenses are simply necessary. You need a roof over your head (either rent or your mortgage), food to eat (groceries), and electricity and water. Write down all of the necessary expenses, but be sure you don’t blur the line between “want” and “need!” Look for ways to reduce spending in so-called necessary areas. For example, you might find that you can reduce your grocery bill by meal planning and eliminating food waste, or you might be able to reduce your car payment by trading in your car for a less-expensive model.

Day Seven: Write Your New Spending Plan

You know what you’re making and what you have no choice but to spend. You have a better idea of what your financial pitfalls are and where you’re making unwise financial decisions. Now, it’s time to write a solid spending plan. Your spending plan should:

  • Start with your income
  • Include savings for both long-term financial goals and short-term ones
  • Have a plan for paying down debt, ideally at a pace that is appropriate for your goals
  • Leave some room for “treats” and spending money that can be spent according to your discretion
  • Reflect all of your necessary spending, from food to gas
  • Account for the one-time or intermittent expenses

If you need a financial reset, this seven-day money cleanse is a great way to get your spending back on track. You need a spending plan that will work for you, not one that will trap you.

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