When I was 24 years old I set a goal to pay off all my debt. I had a car loan and multiple credit cards, all totaling about $30K.
After multiple years of sacrifice and making giant payments, the debt was finally gone. It was an empowering journey that has forever changed my outlook on life.
After my debt was gone, I set another goal to build up an emergency fund. It felt so different paying myself vs. the bank and credit card companies. Different and so good. I had a solid plan of consistently saving. It wasn’t fast moving, but over time the account was getting more and more substantial—at least for someone who was in a hole of debt not too long ago.
While the feeling of saving is different from paying off debt, the lifestyle, sacrifices and satisfaction are very much the same.
Now, my money goals are a bit different. Not only do I want to continue to build up savings and invest for the future, but I’m also prioritizing travel and other experiences.
Here are a few tips I have for setting and reaching money goals.
Set High Expectations: Say you want to save $500. I recommend doing it as quickly as possible—don’t take $25 out of every paycheck and expect fast progress. It’s going to take too long and you’re going to lose motivation. In my experience, the faster you can reach that goal, the more motivated you’re going to be to reach even higher. Of course, it’s also important to be reasonable as you don’t want to get discouraged in the other direction—save too much and then have to pull it out again to pay for necessities.
Know Your Values: Really understanding your priorities helps you allocate your time and money in a way that makes you happy. Write out what you value and see if your money habits and lifestyle are in alignment. When I did this, I realized my lifestyle was not in line with my values, so I sold things and changed the way I was spending my time and money. My life balance shifted, and it feels like the right move.
Automate: No matter what you want, whether you want to get out of debt, start a business, buy a house, travel to exotic places or retire, start automating money to these goals. I feel like automating helps because you don’t have to think about how much you’re going to save this month, it’s already set up and going to happen.
Reward Yourself: It’s important to not only work towards your big goals, but to reward yourself when you hit small milestones along the way. It can be a long journey, but it doesn’t need to be miserable. It can be as little or as big as you want—from buying yourself a coffee once in a while, going out of town or anything else that fuels you forward.
Stay Motivated: Staying on course with your money goals takes a lot of sacrifices. Sometimes it feels easier to derail for some immediate gratification. Staying motivated is important to keep your mind right. I like to read inspiring books, listen to podcasts and hang out with link-minded people to name a few.
No matter where you sit financially, you CAN make big changes in a short amount of time. You just have to want it badly enough.
“Money is only a tool. It will take you where you wish, but it will not replace you as the driver.” – Ayn Rand
Thanks for Reading,