Are You Holding Yourself Back? 5 Steps For Achieving Financial Goals: Are you holding yourself back with your personal financial goals? I would think this is a topic that would naturally come up on any finance related blog. So much of finances have to do with mindset and discipline. I’ve found that people are generally amenable to discussing saving money, investing, and optimizing your life. Everyone wants to save more money. The hard part about this discussion is the action step – actually implementing change. On average, people like the “idea” of saving money but do not want to put the work in. Why is this?
Because change is uncomfortable!
Take someone who starts working out for instance. Working out is uncomfortable, especially if you haven’t done it in a while. You will be tired. Motivation will be low at times. You might even experience some pain. However, in the long term, you will be much better off!
Setting good financial goals: Stop saying “I can’t _____ (insert excuse here)”
It’s easier to say “I can’t” or “I won’t” than actually try. I’ve heard all sorts of excuses and rationalizations for people to continue their spendy/wasteful ways that keep them financially stagnant:
- “I work hard to afford the things I enjoy”
- “I deserve it!”
- “It’s my life, and I will live it my way”
- “Tomorrow is not guaranteed”
- “I don’t have the time to learn about ____”
- “I don’t want to be seen as cheap”
How many times have you heard these or used them yourself?
Setting good financial goals: Motivate yourself for change
In my primary job, I work in a rehab therapy department. We get people from all walks of life, who had some sort of recent trauma with an associated hospitalization. Now, they’re with us to get stronger so they can go home. One of the best truisms that I heard a few years ago perfectly sums up the therapy process: it’s 50% the therapist and 50% the patient. This means the other person has to want to improve. No amount of badgering or convincing can motivate someone who doesn’t want to get better. The people who end up getting better are the motivated ones. They come down to the therapy gym when they’re supposed to and work out without being self-limiting.
The connection between therapy and personal finance may not appear easily on the surface but when you start thinking of people and what motivates them – the parallels are there.
What change is needed?
With most financial goals, it’s a problem of income and expenses. If you do not have enough money, you need to widen the gap between your income and expenses. Since increasing your income is difficult, cutting down on expenses is a more convenient option. For trimming down your living expenses, I’d recommend checking out this post here: 18 Ways To Save Money On Your Living Expenses.
For a list of other articles on saving money, check out the saving money category on the blog.
Setting good financial goals: Find your goals
A goal is a destination. When you are driving somewhere, you are trying to get to a destination. If you do not have a goal, how can you get anywhere?
What is your financial goal? Do you want to start saving so you can:
- Create an emergency fund?
- Begin investing?
- Pay off debt?
All of these are great goals. But the most difficult part is just below:
“80% of Success is Showing up”
Credit to Woody Allen for the quote and it is so true. How can we accomplish anything if we don’t start? Here are 5 steps that have worked well for me. From paying off thousands in debt, to saving and even buying my first rental homes – these steps have yet to steer me wrong:
1. Prepare – Know what you set out to accomplish and establish a plan to get there. If your goal is to save up $1,000 by the end of the month, how will you achieve that? List out the steps that need to be accomplished. Now complete 1 or 2 of those steps per day. Day 1 could be research. Day 2 could be more action based – such as calling your cable company to lower your bill.
2. Focus – In the age of multi-tasking fever, nothing kills a new project quicker than distractions and “multi-tasking”. Eliminate all distractions and focus on your goal only.
3. Make it a game – “Gamifying” a project is a concept that has been around for a while but it seems to work. Break down your goal into little milestones such as: once you reach $250 saved, you can get a coffee with friends. At $500, create another reward. Breaking the steps down into more manageable chunks makes the project less psychologically overwhelming.
4. Positive self-talk – Don’t be your own worse enemy! Negative self-talk is a sure-fire way to stop your new initiative in its tracks. Every step you make towards your goal is progress, never forget that.
5. Keep yourself accountable – Once you set your plan up, initiate and maintain with limited compromise. The plan is a promise you made to yourself. Holding yourself accountable is the most important piece to this entire equation.
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