J.D.’s post at Get Rich Slowly on How Good Habits Keep Small Mistakes Manageable got me thinking about how the less I track my spending, the more I find myself wasting money and exceeding my monthly budget.

I personally use a self-created excel sheet to track my spending and help me stay within my monthly budget. Unfortunately, I irregularly sit down to make the necessary updates. It just kind of happens when I have a couple minutes and I’m near my computer. Sometimes it’s every day, and other times a few weeks go by without me opening the document, pulling out my receipts and punching in the numbers.

There are times when sticking to a budget is challenging and doesn’t always work out as planned. When I do go over budget I try to make up for the over-spending in subsequent months as much as possible.

But then there are the months that I go three weeks without looking at how much money I have spent, only to find that I’ve already maxed out my personal allowance because of sheer laziness. This is almost always the case. As a rule, I have found that the less often I track my expenses, the more likely I am to go over my budget, and vice versa.

It makes sense that this would be the case. The more I look at my spending habits, the more I aware of how I spend my money and how much wiggle room I have left. Monitoring my expenses gives me the ability to judge how frugal I need to be and when I can indulge.

When I fail to track my expenses, I have no concept of how much I’ve spent and how much of my allowance I have left. Looking back, it’s clear that these are the months I find myself eating out more and buying little things I really don’t need. As a result, the consistent little expenses add up to big expenses at the end of the month.

Maybe I should go back and read my Mvelopes Review, and allow software to plug in the numbers and monitor my spending for me.

Millionaire Money Habit: Rather than irregularly checking in on your budget, set a specific day and time each week to track your expenses, or find a program that will do it for you automatically. As a result you will be able to monitor your spending habits and be more aware of your current financial situation, which can protect yourself from exceeding budget. -RT

Asking how to save a million dollars is like asking what the best way is to train for a marathon. For one, just as there are many different ways to train for a race, there are multiple ways to save a million dollars. Each individual and their situation is different as well, which makes reaching a financial goal a very personalized strategy.

If you think about runners, every person is very different in terms of their stamina, strength, willpower, the time they can dedicate, and so on. The training schedule for a person who has experience running marathons, is in fantastic shape, runs regularly, and has a lot of time to dedicate to training will differ from someone who is running their first race and is not in the best shape of their life. But, with the differences aside, there are fundamental methods or strategies that will help each person reach an end result.

Just like the marathon trainer, someone that is planning on how to save a million dollars in the shortest amount of time needs to develop a plan that is appropriate to their personal situation. The game of wealth is not an even playing field. Some people have advantages, such as connections, partners, good money managers, higher income streams, etc. Other people may be struggling to make ends meet and do not know where to begin.

Whatever the case, saving a million dollars is an achievable goal for you. Regardless of your situation, the fundamentals still apply:

1. To save a million it starts with saving $1
2. Start to invest today money today, regardless of the amount
3. Reinvest profits to take advantage of compound interest
4. Leverage the use of Other People’s Money to accelerate profits
5. Manage your risk so you don’t lose money

If you follow these fundamental steps, you will accumulate more wealth. How fast you reach your goals and save a million dollars will depend on your personal situation. Your specific plan on what to invest in, for example, will depend on how much knowledge you have in specific investment vehicles, or if you prefer to be hands-off and hire someone to recommend your investments, etc.

Kipplinger’s recently posted some tools to help you analyze how to save a million dollars if you are at a certain age. This may help you get started.

• HOW TO SAVE A MILLION AT AGE 25
• HOW TO SAVE A MILLION AT AGE 35
• HOW TO SAVE A MILLION AT AGE 45
• HOW TO SAVE A MILLION AT AGE 55

Millionaire Money Habit: In order to save a million dollars, the important thing is to get started now. Often people spend too much time trying to find “the best way.” Do your research, but don’t be afraid to get started or you will miss your opportunity to embark on your road to wealth. -RT
photo by eperales

Last week, I told you about My Biggest Financial Mistake and how I broke some of my own money rules in order to “get rich quick.” I lost big by taking a gamble on Google by playing the stock options market. As I should have predicted, I lost a lot of money. Sadly, at one point the option contract had doubled in value, which is when I should have taken profits. But greed got in the way of my decision making and I ended up losing big.

Luckily, Stephen Cooper’s options strategy has made me more money than I have lost, so it’s not the end of the world.

As painful as mistakes are, these personal experiences are extremely valuable. Mistakes make us better, smarter and more experienced by virtue of a trial and error education.

So, I thought it would be interesting to give you the opportunity to share your biggest financial mistake that we could all learn from. By sharing your experiences, we can take advantage of the power of community and learn from each other.

But iIt wouldn’t be any fun without making this a competition with some prizes. So, here’s how this will work:

Prizes

Two winners will be selected. The first winner will be for the best money mistake story. The second winner will be for the person that drives the most traffic to this contest webpage from their website during the course of the contest.

The winners will be allowed to choose between receiving a copy of Gregory Karp’s, Living Rich by Spending Smart, or Richard Templar’s, The Rules of Money – two must reads for your financial education.

Contest Rules:

1. The contest will run from now until 12 a.m. CST on Saturday, April 5^th.
2. Simply use the comment form below to tell us your biggest money mistake, what you learned, and your advice on how to avoid the situation or make the best of it. Your story can be about a bad investment decision, a poor purchase, or just a bad financial decision in general. No limits.
3. If you are a website owner, you may submit your entry by posting your story on your website and linking back to this webpage. Notify me of your entry by using the contact form with the subject line, “contest entry.”
4. You may only enter once.
5. Your submission will be scored by a panel of judges and graded on how relevant your story is to readers and how practical your advice is.
6. The Website owner who delivers the most visitors to this post from their website during the course of this contest will also be selected. It doesn’t matter how your visitors end up here, all that counts is if that they originated from your website. It can be from 1 link or 100 links on your website, so be as creative as you like.
7. Winners will be announced on this website on Saturday, April 5^th and will be notified via email. Your email will in no way be revealed publicly.
8. Second and third place runner-ups for the “most traffic” category will also be mentioned in the results, with a link back to your website.

Good luck! I look forward to reading your story.

Millionaire Money Habit: There is no substitute for personal experience, but the ability to be coachable or teachable is a quality that will make you very successful. -RT