Staying on track with your money can be a real challenge. Whether it’s saving for something you really want (like buying a house) or putting just a few dollars away for a rainy day, it seems like there’s something that always pops up and gets in the way.
According to a survey by LendingTree, only 22 percent of respondents said they achieved a financial goal they set out to accomplish. As for the remaining 78 percent, they either didn’t succeed or never made a goal in the first place.
Even though it may seem like personal finance is all about the numbers, it’s really just a discipline like any other act of self-improvement (exercising, eating healthier, becoming certified to do a specific job, etc.). The more you want the benefits of your good financial habits and are willing to put in the work, the better your chances are of being successful. With that point in mind, here are seven steps on how to stay financially motivated.
1) Start with Why
At the core of everything you do should be an answer to the question: Why?
Why do you want to do whatever it is you’re trying to accomplish with your money? Think deeper than a simple response such as “to become rich”. Having nice stuff is great, but deep down most of us really want to improve our financial well-being for more personal reasons.
These might be:
- To be able to provide for our families
- To get out of debt or a bad situation
- To have better financial security
To say it another way, what’s the thing you want to happen if you improve your handling of money. It shouldn’t be about what anyone else wants; it has to be internalized from within. This will be critical because when times are tough and you’ll want to give up, you can think back on your “why” and remember what all the hard work and sacrifice are for.
2) Make a List
From your reflection in Step 1, write down all the ideas you came up with. This accomplishes two things:
- It helps you articulate your goals. Often times when we set objectives for ourselves, we only think of them in a vague sort of way. However, putting them on paper forces you to convey what you want into words. It challenges you to refine what you’re asking of yourself.
- It makes your goals real. There’s something about when an idea passes from your thoughts onto a piece of paper. Once it becomes external, it suddenly feels like something you could actually succeed in doing, and this can be very empowering.
It may help to do this with your partner if you’re in a relationship. Not only will this again challenge you to communicate what it is that you want, but it will also give you each a chance to collectively express what’s a priority when it comes to money.
3) Make SMART Goals
To really make your financial desires actionable, it’s helpful to turn them into what are known as SMART goals. SMART stands for:
There’s a big difference between saying you want something and phrasing it as a SMART goal. For example, suppose you’d like to do a better job saving for retirement. Consider the following:
- Non-SMART goal: I want to retire when I’m older.
- SMART goal: I will retire at age 55 with a nest egg of $2 million by investing 20% of each paycheck.
Notice the difference? The SMART goal was far more detailed. It read almost like a roadmap citing where we’d like to be and how we’ll get there. By characterizing the goal in this way, it seems far more plausible and likely to be achieved.
Note that another outcome you could arrive at by making your goal SMART is that perhaps it’s not achievable. For example, if you had said you’ll save $5 million in the next 10 years, then unless you have a high-paying job, then there’s a very low chance of success. This isn’t necessarily a defeat – it just means you’re doing your diligence to determine what’s realistic and what’s not. This is an important part of the screening process because it helps redirect your focus on those efforts which are more likely to happen.
4) Share Your Goals Openly
Once you’ve got a plan, one of the most motivating things you can do with it is to not keep it a secret. Whether it’s to pay off your student loans or start a business, tell the world and make it known.
Again, saying your goals out loud makes them feel more real. Especially when they’re communicated to others, this puts you in a position of accountability. We all have an inherent desire to want to follow-through with the things we’ve put our minds to. Therefore, when you express those wishes to others, you’re putting yourself in a position where there’s no turning back.
5) Surround Yourself with Support
Nothing deflates your efforts financial improvement efforts more quickly than nay-sayers. In life, there will always be people who will tell you “That will never work” or “Why bother” for one reason or another. However, do yourself a favor and don’t listen.
One person’s misfortune is never a guarantee that someone else will have the same outcome. Just because someone else was unsuccessful at investing or struggled to maintain a budget doesn’t mean you’ll have the same fate. With the right knowledge and perseverance, you’ve got as good a chance as any that you’ll be successful.
For that reason, what you’ll want to do instead is surround yourself with people who are positive. Take up an audience with people who inspire or encourage you to do better financially. This will invigorate your efforts and make you want to reach higher instead of settling for less.
6) Stay Engaged
Another great way to stay focused on your financial goals is to immerse yourself in the topic. Read up or watch videos on the latest news regarding the thing you want to do.
For instance, if your goal is to become a better investor, then find media that teaches you how to do this. By hearing other people’s stories, you’ll not only learn new ways to improve your strategies, but it will also reinforce the notion that your goals are obtainable.
Another system that works really well is to regularly review your purchases. This can be easily done with a budgeting app like Buxfer where all of your bank and credit card transactions can be automatically consolidated into one report. Making the information available in this way gives you real-time data so that you’ll always know if you’re on track or need to make any adjustments.
7) Hold Yourself Accountable
Throughout your financial journey, there are going to come times when you’re distracted. Other priorities with family and work will take precedence, and your attention may wane. However, don’t allow yourself to stray too far or succumb to excuses.
Remember that no one else wants what you want. Your money and what you do with it are personal to you, and so it’s up to you to see it through. Again, if you’re ever in doubt, return to your “why” and remind yourself of what you’ll gain by working towards this goal.
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