I’m sure that most of you are filled with questions about how to get started with regards to your journey to [tag]financial freedom[/tag]. Its daunting believe me, I’m right there with ya! We are faced with changing years of bad money habits, habitual emotional spending and developing and maintaining new goals. Its alright if you fall off the bandwagon, it happens. Just get back up again and keep chipping away at it.
How do you maintain the right perspective?
1. This is a process
Sure, we read a few blogs and get the epiphany that we CAN get out from under our debts AND we have proof that others have done it. Keep in mind that while some of the blogs you read are by people who have reached their goals, they were once where you are today. But it took them going through the process of getting on and falling off and then getting back on again in order to get to their goals. Again, you’re working on changing a large habit in your life. That is, changing the way you view money. How do you view money? What does money mean to you?
2. Set and Maintain S.M.A.R.T Goals
Tristan Loo explains SMART goals here:
Specific: Do you know exactly what you want to accomplish with all the details?
- Increase savings and/or emergency fund
- Reduce debt
Measurable: Are you able to assess your progress?
- Save $2500 per month
- Reduce debt by $1500 per month
Attainable: Is your goal within your reach given your current situation?
- Make it automatic via drafts through ING
- Allocate $1500 of take home pay to debt
Relevant: Is your goal relevant towards your purpose in life?
- Yes, I will increase savings
- Yes, I will reduce debt and free up more money to increase savings
Time-Sensitive: What is the deadline for completing your goal?
- Target goal–> December 2008
Do this for each area you wish to make a change and write it down on paper or in a journal.
3. Incorporate Discipline
Again, it takes discipline to get situated in your new approach to money. If you are like me and need a schedule then develop one. That is, get on a schedule with your finances, get a Bill Calendar and review it weekly if you need to just to get in the habit of making it a part of your life.
4. Outcome-What Do You Really Want?
Seriously. What do you really want? To be debt free? MY goal is to be one of the callers on the Dave Ramsey Show who screams IM [tag]DEBT FREE[/tag]E!!!! Do you want to fully fund your 401k for the year? 6 months in an Emergency Fund?
Think about it and write it down.
Determine what exactly you want out of this process and maintain that goal. It will take discipline on your part and you’ll suck at it a few times. But you’ll gain a deeper understanding of the process, what you want out of it and how to get there.