So you have sat down and figured out what the status of your financial existence is. GREAT! Now we know where you are starting but where are you going? Every point A needs to have a point B.
So step 2: Set a Goal
What is your goal? What are you working towards?
I like small goals first in a first timer situation. This goal should be two things: 1)Specific; and 2) Shorter in Time Frame.
Goal 1 – I want to save a million dollars for retirement in 30 years. BAD FIRST GOAL
Goal 2 – I want to save at least $25.00 per paycheck for retirement for the next three months. GREAT FIRST GOAL.
Your goal doesn’t have to be something as major as saving for retirement. My personal favorite is to stay on budget for two weeks. Just two weeks. You will be shocked at how difficult this goal can be for a first timer. This goal does two things, doesn’t set you up for failure and gives you a good idea of any nasty habits you may have that need broken. Which will segway you into my other favorite goal is kicking a habit. Give yourself two weeks to either kick a habit or come up with a suitable substitution/accommodation.
A great example from my own existence. When I did my two week budget challenge (and during the bank account review), I realized I spend too much at Starbucks. So I look for a solution that still lets me have my fancy caffeine fix. I downloaded the app on my phone, loaded a gift card with 20 bucks and said to myself, this is how much I am allowed to spend at Starbucks for the two week period. When I run out I am cut off. I will not feed the beast. Lo and Behold, I was out after a week because I was still going too much (and buying cookies…bad for the budget and the waistline…ugh…). So a new plan on the second two week round, I bought a private stash of fun K Cups, stashed in my desk (10 bucks on amazon about once a month) and cut my budget for Starbucks back to 15 bucks. Tried again in the next two weeks and STAYED ON BUDGET. These little tweeks needed to make your goal can only be made if you are giving yourself a small goal that is short in duration to start out with.
Once you have achieved a smaller goal, build on that progress. If your goal was to stay on budget two weeks, maybe next time make it three weeks, than a month, than three months. Before you know it what was once a goal will just be something you do instinctively.
On setting more than one goal:
If you can handle it do it, if you are still working on your first goal and struggling DON’T.
If you want to manage multiple goals, I like goals that work to achieve the same end. So let’s say you are like me and you need to drop a few pounds and do a better job of staying on budget. This works together nicely. I put myself on a more liberal grocery budget and a very strict eating out budget. This will help me curb that spending we all do on fast food which is good for my waistline and my wallet. These goals are ultimately working to the same end. This makes it twice as nice when you achieve the goal (plus think of all the money you will save for new jeans!)
Which leads me to my next topic for next time: Creating and Following A Budget!
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