Broker Check

How Do You Reach Your Money Goals?

How Do You Reach Your Money Goals?

| April 05, 2019

I think a lot of us have asked this question at one time or another. Well, today we have seven ideas that could possibly help you reach those goals.

The first idea involves getting back to the basics: Write out where you are. This involves knowing how many dollars you actually have in current assets, what your debt is, and especially what you spend our money on…AKA your “spending patterns”. Recognize what you need to change, what you can change, and what you will change. These three things can vary dramatically.

The second idea is to have a dream. And dream big! Dream it and believe in it. Then you can plan it and do it. Start by looking at the pros and cons. Then ask yourself, “Could I do it, would I do it, and if so, when is the best time to start?”  You have to challenge yourself to change your dreams, change your thoughts, and change how you’re going to accumulate money.

Next, share those goals with a spouse, partner, or someone that you trust to help hold you accountable; perhaps be accountable to each other. We all know that progress starts by telling the truth, but telling it to yourself can be brutal. We have to be realistic about what is working and what isn’t working. An outside perspective can be invaluable here.

The fourth idea involves taking baby steps. You didn't get to where you are overnight… and you’re not going to get out overnight either. So, consider your saving patterns. Start small and then increase it. A great place to start is with food. Do you cook at home or eat out? If you eat out, try less often. And consider what you order more carefully. Most menus today offer meal deals – folks spend more and then end up with excess. By ordering a single item, you might save yourself a little money and maybe some unwanted calories. It’s just one example of a habit with overlooked and unnecessary extra costs. Automating your savings through payroll deductions weekly or monthly to help with your discipline is an easy and effective tool also.

The fifth step is to take a hard look at your debt and the terms of that debt. Today when folks make a large purchase, they often don't consider how many months the payout is or how many paychecks it will actually take to pay it off. You need to be practical with your long-term purchases and make sure it doesn't reach out there too long. For example, a car loan scheduled for more than 48 months is too long because by the time you pay it off, you owe more against it than what it will be worth. Or the car won’t be worth what you need to apply towards a new car.

If you use your credit cards, make sure you know what you're paying in fees, and that you understand how much you’re paying in interest. Ideally, you don't want to charge more than you can afford to pay off on your cards every month, but most of us have to do some work to get to that point.

Bad habits are the sixth issue. Bad habits are usually expensive and some of those funds would be much better served by saving them to achieve your goals. Bad habits don’t just involve eating too much junk food, drinking, or smoking. There’s also the living in a disposable society variety: Is your TV broken? Repair it? No, just buy a new one! Tired of your car? Get a new one – there are always big incentives. A lot of us tend to fall prey to that type of thinking and it adds up quick. And then there is the impulse shopping variety. Grocery shopping may be the worst – if you don’t have a list and stick to it, it’s amazing what you might end up with. There is a big difference between want and need, so be sure to ask yourself when considering a purchase “Do I really need this right now?” If not, wait. It might save you more than you realize in the long run.

The final step is to review recurring monthly expenses.  This could include streaming services, cable memberships, credit cards, membership fees or dues, etc.  Ask yourself again, is it really necessary? Do you really need to go to the movies two or three times a week when you have Hulu, Netflix, or Sling on your home screen?

When considering each of these things - your spending patterns, your dreams, your baby steps - be specific and honest.  Share your goals, let go of bad habits, and review those monthly expenses.  Again, write your goals down and share them with someone.  Review what you did last month, see what you're going to do this next month, and look at it quarter by quarter and in no time, you will be saving money.  Your account will grow, you'll have money when you want it, and you’ll avoid the stress of not having funds when you really need it.  I hope these ideas can help you begin ‘living Life on purpose!’