By Bill Losey

Many of us plan thoughtfully for all kinds of life goals. Yet many of us spend impulsively, using our money on the moment rather than saving or investing it for the future. This last recession caused us to take a second look at where our dollars go. If you seem to be earning adequate money and yet your dollars still appear to be slipping away from you, maybe it’s time to break some spending habits.

Have a budget.
Many people live without one, and that includes affluent people. This exercise is starkly simple, but might be illuminating: make a two-column chart, with the left column listing your monthly income and the right column detailing your expenses. Detail them as best as you can, by type and monthly amount. Include your credit card expenses. This little exercise shows you how much you are spending on essentials and how much of your income you are assigning to comparative frivolities. Perhaps you will find some dollars you could reassign to planning for your financial future.

Distinguish needs from desires.
Do you need that material item, or do you merely want it? Slick marketing and advertising leaves many consumers unable to tell the difference. They run up debts to buy what they want rather than what they need. How many of them understand that by borrowing, they are actually spending away future earnings?

Discern between good and bad debt.
Do you know the difference? A bad debt is a debt you incur on a disposable item or a durable good that will depreciate. It is a debt on something that has no potential to gain value. Avoid as many bad debts as you can. Of course, there is also good debt; for example, a mortgage, a business loan or a student loan. These are so-called investment debts that can potentially create value down the road.

Educate yourself.
Some people are very cavalier when it comes to spending and saving money. Others are convinced that they will never be able to build wealth, so they spend their days addressing short-term financial needs and give no thought to the wealth and income they will need in maturity. In both cases, the root problem is a lack of education. Those who spend money like water don’t understand its value; those who shun financial planning and investing don t understand its potential. People with greater degrees of financial education tend to be more rational when it comes to financial decisions. (Not always, but often.)

Set financial goals and take them seriously.
When people educate themselves about money—the ways to potentially make it, the ways to plan to protect it—they start to see how the financial world works and they tend to explore their own financial potential. This exploration may lead them to meet with a financial advisor. That conversation can inspire them to set and plan for specific objectives, and get a relationship going a shared commitment to wealth building. If you haven t had such a conversation, today is as good a day as any for that to happen.

Bill Losey, CFP, CSA, America’s Retirement Strategist, is a sought-after advisor, retirement authority, thought leader, author and national TV personality because he makes the complicated and mundane topics of investing and retirement with over 20 years experience in the financial services industry. He is also the author of Retire in a Weekend! The Baby Boomer’s Guide to Making Work Optional. For a complete bio, visit myretirementsuccess.com.