Technology is changing the world and personal finance at an unbelievable rate.

Remember when tracking your spending involved pen and paper, now we have website that does it automatically. It is to the point where we don’t have to do anything, but continue spending as we normally do.

But even with all this technology many people are still finding it hard to maintain a budget, track spending, and automate their savings.

I was talking to a friend last night about using a site like Mint.com to help him manage his money. I asked why he doesn’t take advantage of something that does all the work for you and is completely free.

His reply was:

I’m too lazy

Too LAZY! Too lazy to do what? I couldn’t believe it. 

I spent the entire night (12AM- 5AM) thinking about what he said. It is amazing to me how human beings, the smartest creatures on the planet can be so stupid. My mother once told me “ lazy people work twice as hard” and he is living proof.

Managing your personal finances can change your life for the better.

I have never heard of someone going broke from practicing financial management. Have you?  In spite of all the technology out there, many people refuse to get their act together.

Why? I can’t figure it out.

Is the desire to buy things you don’t need that strong? Are advertisements that powerful? Are we brainwashed (just throwing that one out there)?

If I told you that personal financial planning is a surefire way to retire early with enough savings to live the life you want, would you practice it then?

Well, it is and it has a very high success rate. That is the reason you hear so many people preaching it.

If you punch your information into an Excel spread sheet or the Mint website and go over what you did with your money at the end of the month, most of you would want to kick yourselves for not doing it sooner.

The technology is there, all we have to do is use it. Don’t make laziness be the reason you are still working at 70.

This has been a guest post by Jay Scott.

Jay Scott is a personal finance blogger over at jinij.com. He uses is site to encourage others to start on the road to financial freedom.

Tom and Sue had some great financial goals in mind.  They wanted to start saving for the girls college education, but weren’t sure what kind of account to use. 

“There’s so many choices, I’d like to do some more research before I sign up for something.  I want to make sure we’re using the right account.  After all, this is for my baby girls.” Tom told Sue affectionately. 

They also wanted to start maxing out Tom’s 401k at work, but haven’t gotten around to it.

“Did you increase your contributions to your 401k yet Tom?”   “No, I wanted to wait to see what kind of expenses we had coming up with birthdays and our anniversary right around the corner.  I wanted to take you out to that new Italian place that just opened up to celebrate” Tom responded.   “That place is expensive isn’t it?”  “Yeah, but it’s our anniversary, it’s OK to spend a little on a special day like that”. 

They set a goal to establish Roth IRAs this year too, but haven’t been able to find the money to fund it. 

“Sue, did you run the numbers on the budget yet to determine if we can get those Roths going?”  asked Tom.  “No, I haven’t had time.  I’ve been so busy with the girls and plus if we are going to take that cruise this year I just don’t think we’ll have any extra money.  I guess we could just put the cruise on the credit card as long as we pay it back right away.”

“How much do we have saved for the cruise?” asked Tom.  “Right now we have about $100 that we just put into savings” Sue responded.  “Where did all the rest of it go?” asked Tom with an agitated tone.

“Are you kidding me?  You’re looking right at what happened to it!” Sue said sharply.  Tom gazed at his brand new 50 inch Plasma TV.  “The ’12 months same as cash deal’ was coming due and I didn’t want to pay the interest so I took the money from our savings account to pay it off.”   Tom felt a twinge of guilt, “but that HD sure is sweet”, he thought.

“We really got to start tightening our belts and get our finances in order” Tom said.  “I know, but every time we try it seems like something else comes up” Sue responded. 

There’s Always Something

Have you ever felt that way?  Every time you start getting your finances in order something else comes up?  This is true for all of us.  There is always something else to take away our time, energy and money.  The difference between those who actually reach their goals and those who don’t is discipline. 

Let’s face it, working at our finances is usually hard work and often not that fun.  Taking a realistic look at your expenses, developing a budget and researching where you should be saving your money requires effort.  For some of us it requires a lot of effort!  It’s often tempting to allow ourselves to be distracted by the things we’d rather be doing than the things we know we should be doing. 

Least Resistance

This is known as the path of least resistance.  Wikipedia describes it this way: “The physical or metaphorical pathway that provides the least resistance to forward motion by a given object or entity, among a set of alternative paths”  We could say it’s why certain objects or people choose the paths they do. 

Water takes the easiest path downhill as it’s pulled by gravity; storms follow zones of low barometric pressure that offer less opposition; and humans often take the easy way out than rather than fight through difficult circumstances, temptations or trials to accomplish goals or tasks. 

It’s ironic from a human standpoint though isn’t it?  Think about the times you felt most proud of yourself.  Isn’t it usually when you disciplined yourself to do something difficult and came through on the other end having accomplished it?  We get the most satisfaction from doing the hard things, but often times we don’t do the hard things because, well, they’re hard.

Avoiding That Path

So how do we avoid taking the easy way out and truly change our habits so we can accomplish the tough financial goals we’d like to get done?  Here are some simple strategies to get you thinking.

Work As a Team

If you are married, it is extremely important that  both of your are on the same page when it comes to your money.  Husbands, as the servant leader, you need to step up and cast the vision and provide the direction for where you want your family to go in terms of your finances.

Start With a Small Step

Radically changing your money habits won’t happen overnight, but begins by taking some “baby steps” as Dave Ramsey often says.  Instead of going out for lunch five days a week, pack a lunch for one day and save that money. 

Do Hard Things First

This is easier said than done, but rather than saying you’ll start that budget next month, start it today.  It’s easy to procrastinate on the things you don’t want to do.  Giving and saving are things you have to be intentional about, otherwise those are the things that are easy to push back until you “have the money”

Stop Making Excuses

Let’s be honest, most of us can make some sacrifices and save a little more, pay down a little more debt, be more generous and get our finances in order, but we just don’t –  for a million different reasons.  We need to recognize the excuses and work at killing them!

Review Direction Regularly

Charting the course to financial freedom is never a straight path.  It requires regular review and adjustments.  Oftentimes you’ll find yourself cruising along with some new goals you’ve established only to find those bad habits creeping back in.

What About You?

Avoiding the path of least resistance takes hard work and a motivated effort.  With some discipline, you can get on track towards achieving your financial goals.  You’ll feel so much better about yourself and your situation when you stop taking this path, lay down the excuses and start doing the hard things. 

Have you taken any difficult steps to get off the path of least resistance?  What were some of the sarifices you’ve made to help get you started in the right direction?  What were some of the biggest excuses you made (or are making) that kept you from getting ahead financially?

Your debt may be costing you more than you realize especially if you are making these 5 mistakes.  Paying off your debt is a battle you can win by bypassing these blunders:

1. Not paying the bill in full each month

This is where it all begins.  You buy something you can’t afford and think to yourself, “I get paid in two weeks, I’ll just put it on the credit card and as soon as I get the bill I will pay it off” and then something else comes up.  Your brakes go out, your washer quits working  or you find some other trinket you want to buy and you put that on your credit card too.  At the end of the of the month you receive a hefty bill and only pay what you can and wind up leaving a balance on the card that accrues interest at insane amounts. Creating a budget will go a long way in helping to avoid this problem.

2. Only paying the minimum payment

If you are paying only minimum payments on your debt, your credit card companies love you and you should be getting Christmas cards from them each year.  Paying the minimum payment will basically ensure that it will take a lifetime to pay off your debt.  You must pay more than the minimum if you want to get anywhere with your bills.

3. Not paying attention to due dates

This is easy to do because we are busy people, but making a late payment even if it is only by a few days can rack up ridiculous charges that only compound your debt.  Those annoying charges can also have an impact on your credit report.  Being vigilant about paying your debt and paying it on time is key.

4. Not paying attention to the interest paid

If more people understood how much interest they are paying to their card companies each month in interest alone, perhaps they would make a greater effort in getting these debts paid off.  Matt Jabs at DebtFreeAdventure.com takes a revealing look at his own interest payments for the month and shows how interest destroys your ability to build wealth.

5. Not negotiating with the card companies

It puzzles me that more people don’t call their card companies to negotiate with them.  You can negotiate things like interest rates, late payment fees or even payment plans.  If nothing else, it doesn’t hurt to give them a call and find out what they can do for you.  Bob Lotich at ChristianPF.com tells about his experience in  negotiating with credit card companies. 

Getting out of debt isn’t easy, but don’t make it harder on yourself by making simple mistakes that can easily be avoided. 

Few things can make people’s skin crawl like the idea of creating budgets. If you are unsure where your money goes each month or wonder why you never seem to get ahead, a budget might be a good tool for you.

Budgets conjur up feelings of kissing your freedom and your fun goodbye, and some people even try to mask the feelings by calling it a spending plan.

Ironically, many people find budgeting a highly liberating experience. A budget, sorry – spending plan, can be a great tool to help control your money instead of your money controlling you.

What many find after creating and sticking to budgets is they have more money to spend on discretionary items and can have fun without the guilty feelings.

I’d like to provide some simple and practical ideas on how to create a budget and tips on sticking to it.

Creating a Budget: Where Are You Now?

The best place to start in creating a spending plan is to find out where you are. When you Mapquest directions you always need a starting address. It’s the same idea with financial planning. Getting an idea of where you are is an eye-opening experience for many people. To me, the best way to figure out where you are is to do a 30-day diary of expenses. It takes a little more time up front, but I feel it reaps big rewards.

Write down every single dollar you spend in a month whether it’s coffee at the gas station or lunch at a local restaurant. After 30 days of doing this you will get a pretty good idea of what unnecessary expenses you might be able to cut out.

Next, list out the categories of each expense (i.e. gas, food, clothing etc.), jot down the amount in each category and determine if those numbers are realistic. For example, you may find that you spent $75 that month on lunches, but by making your own lunch once or twice a week you feel you can get that down to $50. Use that number for your plan and do this for each category.

Creating a Budget: Where Are You Going?

The next step is to figure out where you want to go financially. What I mean is consider what goals you want to plan for. You may have a goal to give more of your money to charity or to save for your child’s education or your own retirement. List out each goal so that you know what you’d like your money to do for you. This doesn’t mean you will be able to save for each goal, but listing them on paper is a powerful and motivating tool.

It’s important to remember that these items must come out first, otherwise you and I both know that if you wait to see how much is left over and then try to give or save it probably won’t happen.

Creating a Budget: How Do You Get There

Once you’ve determined where you are and where you want to go the next step is to put some numbers down. Write down all of your expenses and the alloted amounts or targeted numbers for discretionary items like going out to eat. One of the reasons budgeting becomes such drudgery for many people is that they don’t plan for fun things. Bob at ChristianPF.com has a good post about how budgeting should be like making cookies.

Michelle Jones, editor of BetterBudgeting.com, has personally reviewed and recommends several budgeting tools to help get you started. She says these budget tools “can be extremely useful and will help you stay on track year after year, but the most important thing is that you find something that works well for you and your family.”

Once you’ve outlined your alloted expenditures, factoring in your savings and giving the hard part is sticking to the plan. Review it often and make adjustments as necessary. Remember, the budget is meant as a tool for you to control your money so don’t let the budget control you. Be flexible when needed, factor in the fun things and persevere.

Creating a Budget: Staying On Track

Here are some general tips to staying on track:

• Make it a family affair.  When everyone is working together toward the same goal you are more likely to stay on track. 
• Check your progress regularly.  Ideally once a month you should sit down and review how you did and make any adjustments as necessary.  You may have budgeted $100 monthly for gas, but you find after a few months it isn’t realistic.  It’s OK.  Make your adjustments and determine where you might be able to cut back. 
• Make it a lifestyle.  You’ve heard people talk about this with food: “it’s not a diet it’s a lifestyle”.  The same can be said for budgeting.  Make it part of your life and with some discipline you will reap rewards. 
• Start at the right time.  Don’t start when you know it will be difficult (e.g, right before the holidays or before a major vacation that was already planned)
• Find a budgeting system that fits your needs (e.g., budgeting software)
• Build rewards into your budget (e.g., eat out every other week)
• Try to avoid using credit cards to pay for everyday expenses.  Using credit cards makes it more difficult to track your expenses.  After you get the hang of your budget and have been sticking to it, you may feel comfortable enough to start using them again, but remember to pay off your balances in full each month.