Just like every other aspect of life, in order to be successful with your money, or at least better with it than you have been, you need to have a plan and set some goals. There exists many ways to go about doing this, from setting incremental goals to having certain steps that mark your progress.
Here’s my basic plan as of right now:
· Step One: Pay off Dodge Dakota
o Put all extra money towards paying off the Dakota until I owe nothing.
· Step Two: Pay off Credit Card
o Take all money that was being applied to the Dodge and use that to pay off the credit card
· Step Three: Build up 3 months worth of cash savings
o Transfer all extra money at the end of the month to my Ally bank account until I have 3 months worth of living expenses.
· Step Four: Look into investments, including Traditional and roth IRAs, Index funds, and other investment vehicles
o Research each of these investment options and determine what’s best for me
Do you have a plan? It’s not something that has to be big and fancy, just a general idea of what you want to do with your money in what order, and the steps you will take to get there. Of course, the more detailed you get with your plan the better. Below are some tips for sticking with your goals.
1. Write them down: Every goal is given a fighting chance of seeing completion when written down, as opposed to simply spoken.
2. Post written goals: Once written down, post them somewhere, such as on the refrigerator or on the dashboard of your car. Repeatedly seeing your goals and being reminded of them will cement them into your brain, as well as making you feel a little more accountable.
3. Tell everyone what your goals are: If you’re comfortable with doing this, tell any and everyone you come across about your financial plan. This one will keep you really accountable, as people will occasionally ask you how your plan is going, and you’ll want to be able to truthfully tell them that it’s going well.
4. Develop a mantra: Okay, so it sounds incredibly mystical and magical, but I really do take stock in this idea. When you say something to yourself over and over in your head, you begin to believe it (I guess the mind is pretty impressionable). Something as simple as “I have to save money”, or “stick to the plan”, can really change your attitude, which then in turn changes your behavior. This concept is related to my earlier post on Neuroplasticity
5. Keep them realistic: Don’t make it your first goal to simply pay off all your debt, start with an individual item. If the goal is to save money, set incremental goals and keep track of where you’re at. Breaking down your goal into small, manageable chunks can do a lot for your optimism and resilience.
6. Don’t expect overnight results: In almost everything in life, those who simply last longer and have the most determination and persistence will beat out the better, smarter, bigger guys out there. Just keep working towards your goal, no matter how discouraged you get.