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Achieve Your Financial Goals In 7 Steps and The Books That Will Inspire You
Achieving your financial goals is a step by step process. To help you get there we have compiled a step-by-step list that you can put into action right now
1# Set your goals.
This may seem obvious. Saying it is easy. Sitting down and doing it is something that you need to carve out a little time for. 15 minutes at the least. What is important about this first step is. Because this step is so important, I’ve broken it down into 3 crucial steps:
- Dream it. This step doesn’t (necessarily) happen at a desk. Take yourself out. Whether it’s for coffee / tea or for a walk, run, surf. Do it in a setting that inspires you. Think about what matters to you. Visualise it. Think about what you value. What kind of lifestyle do you want to live? What do you want your money to achieve for you?
- Plan it. Now grab your notebook, sit down and write down your financial goals. Including that lifestyle that you want to live. Be as specific and descriptive as possible. Then calculate how much is needed to achieve those goals.
- Live it. Now that you know what your goals are, and have defined them clearly, you can go about reaching them. One step at a time.
2# Become aware of your finances.
At the end of the day, you are bringing in an income from some source whether it’s a salary, a side business, investments or a combination of these. The money that you are bringing in is also being spent.
Become aware of your net worth. Take a good look at your bank accounts. Your savings. Your debt. How much is it? Do you have a positive net worth or are you in the red? Know where you stand right now.
Next, become aware of the inflow and outflow of your finances. Where is it going? What are you spending it on? Now the big question… is it worth it?
#3 Spending clean-up time. Spend less.
Now that you know where you stand, and where you want to be, in terms of achieving your goals, it’s time to take the steps to get there.
Spend less and spend consciously. This doesn’t have to equate less fun. Once you take a good look, you’ll realize that you are spending on things that add little to nothing to your lifestyle and to the things that you value. Spend less on those things. Better yet, cut them out completely. When achieving your financial goals, it’s important to win on both sides of the ledger, so to speak. Spending less on the things that don’t matter to you, and less overall means having more to devote to your goals.
Read: “Cut Your Grocery Bill in Half With America’s Cheapest Family,” by Steve and Annette Economides
4# Pay yourself first. Save more.
Start with saving. Before you spend. When there is an inflow of money, put away what is in excess of your budget, first. Then, leave it there. Being strict with yourself, and not eating away at your savings is very important. Give it room and time to grow. Also, keep contributing to it consistently.
By taking the first step, of defining your goals. Steps 2, 3 and 4 are made easier. Your goal is your big motivator!
Note on credit cards: In some countries like the US and Canada, it is very common to use a credit card and carry a line of credit. Often credit card companies will reward clients for using their credit card, by offering points toward a reward program, or some other loyalty program. This can be attractive, especially if you are consistently paying off the whole amount of your debt within the payment period. The problem is, most people end up paying only the minimum payment. As such, borrowing costs money. By spending borrowed money today, you are giving yourself less money in the future. Though reward programs can be tempting, wouldn’t you rather control your money and decide how you reward yourself?
Note saving does not necessarily mean that you are getting the best deal for where you put your money. To skip forward to more on this, Step 6 talks about how to make your money work for you.
Read: “Your Money or Your Life,” by Vicki Robin and Joe Dominguez with Monique Tilford
5# Be consistent. Design and stick with your budget.
Spend on the right things that matter. Now that you know what you have, put it only toward what you need and what you want.
Read: “Psych yourself rich,” by Farnoosh Torabi
6# Make your money work for you! Get into investing.
Getting into investing is about making your money work for you. If you’re new to investing, and want to start read our articles
Read: “If You Can: How Millennials Can Get Rich Slowly,” by William Bernstein
7# Follow your own path. Don’t be a sheep. Do your own thing.
Taking the steps toward achieving them involves staying your course and being confident in your well-informed steps. There is no room for doubt and comparison here. Blanket statements like, “your whole portfolio is garbage” or a well-meaning friend that remarks, “I hear that investing is risky and expensive”, are not helping you achieve your financial goals. Be warry of individuals (be it friends or stock brokers) that may share (un)solicited advice with you, while they may or may not have your wellbeing at best interest. Common scare tactics and unapprised insecurity (maybe even jealousy?) are not helping you. They are hindering you. Stick to your path! Follow your goals.
Also, steer clear of the hype. What is in fashion comes and goes. Fad stocks or investments that someone boasts about at a cocktail party are also something to steer clear of.
Read: Exposing the Dark Side of the Personal Finance Industry, Helaine Olen
Extra: The Wild Card
Read: "The Behavior Gap: Simple Ways to Stop Doing Dumb Things With Money” by Carl Richards.
This is an important read to stop making decisions that are heavily related to emotion, when it comes to money.
So the goal is...
The goal is to start achieving your financial goals by making little changes today that will pay off big time, down the road. Are you on your way to achieving your financial goals? Have you achieved a financial goal already, and are in the process of setting more? Tell us about it. We would love your perspective.
