Welcome Back! Today is a “Guest Post” from Carmesha. She is a mid-twenties, talented, young, and educated individual who decided to stop by and give 4 quick tips to stay committed to your financial goals. Remember, it’s 2012 and its important to start the year off right.
One of the most popular New Year’s Resolutions for Americans is to get out of debt, so it is clear that for many of us, financial freedom is at the forefront of our minds. Every year starts out the same with a list of goals and a couple of weeks worth of excitement and motivation…but somewhere along the line a lot of us lose steam and revert back to bad habits. Well not this year! This is the year that we plan for success! Here are some tips to help you stay committed to your financial goals:
Have a plan of action. A goal without action is just a dream. Come up with a list of specific actions you can take to ensure that you meet your goal. For example, if you want to save $1000, you may list things like switching to a cash only budget to curb extra spending, taking on an income generating projects on the side, or selling 10 items you don’t need on eBay for some extra cash. Once you have the list of options, decide which actions you will commit to actually doing, and how often you will need to do these activities to ensure that you meet your goal.
Use automation to your benefit. Sometimes we have trouble finding the motivation, the time, or the will power to do what we KNOW we need to do. Remove all of those barriers by creating a system that does the work for you. With money management, the best example of this system in action is using automatic money transfer. Consider the $1000 savings goal again; instead of physically taking money from your paycheck, driving to the bank and depositing money in savings each month, why not set up a direct deposit where $100 from each paycheck goes directly into your savings account? This not only helps you exceed your goal, but it makes your savings a priority (it comes out before your other expenses), and takes very little effort on your part. Or, if your goal is to get out of credit card debt, figure out how much you need to pay each month to achieve that goal and set up automatic payments for that amount each month to ensure that you reach your goal and guarantee that you don’t miss a payment.
Block out distractions. Think of your journey to achieving your goal as a race, put your blinders on and focus on the finish line! You know what your weaknesses are, so structure your life in a way that decreases your exposure to distractions. This may mean taking an alternate route home from work to avoid your favorite restaurants, taking your name of the email list for your favorite retail stores, finding new hobbies that don’t require you to spend money. Keep your credit card hidden in a safe place while you work on paying it off.
Take a leap. A drastic change might be just what you need to light a fire under you! Apply for a new job with a higher salary and more room for professional growth. Slash your expenses by downsizing to a smaller apartment, or selling your car if it would be feasible for you to rely on public transportation. Create a website to sell your goods or services. Actions like these might make you feel a little uncomfortable at first, but like the saying goes, it takes pressure to create a diamond. Each example I mentioned has the potential to greatly improve your income, or greatly lower your expenses. Lowering your fixed expenses (housing, car) can free up money each month that could be used to achieve goals of getting out of debt, padding your savings account, preparing for retirement, or becoming your own boss. On the other hand, taking actions to increase your income will not only pay off in the present, but with a beautiful thing called compound interest, can make your money grow even faster in the future.
Carmesha is the author of A Dime and Her Nickels , a blog following the young woman’s journey to financial freedom with personal finance tips, tools, and downloads available to help others to take control of their finances.