Money can be one of the largest stresses in life, but it doesn’t have to be. People who have well managed finances, whether they are paupers or princes, don’t face the same stresses as people with poorly managed finances. If you are ready to reduce your stress loads, it’s time to learn how to achieve your financial goals.
Set financial goals
Before you can work toward your goals, you need to know what they are. If you want to stop living paycheck to paycheck, stressed about every late bill, you need to identify where you want to be financially. Make detailed short and long term goals.
Make visuals of your goals.
It’s easier to achieve your goals if they are literally visible. Write them down. Have a short term goal that you need to meet this week? Post a note on your bathroom mirror and focus on that goal every morning throughout the week. Have a long term goal that feels more like a dream because it’s so far in the future? Draw it, paint it or write down and tack it to the ceiling above your bed. The more you visualize your goals the more likely you are to achieve them.
Whether you want to pay off all your debts, increase your income, expand your business or tackle any other financial goal, you need to be realistic. Don’t plan your budget so tightly that you never get any treats. Don’t overextend your work hours so much that life ceases to be fun. That can make you resent your efforts and move further away from your financial goals.
Find joy in your budget.
If your finances are not well managed, you often face constraints and annoyances, ranging from not being able to afford something you need to dealing with bill collectors calling your phone. As you stick to a budget, remember that your budget is helping you avoid these annoyances, and try to look at your budget joyfully.
For example, if you see something you want to buy but your budget doesn’t allow that expense, don’t let yourself feeling like you are missing out on something. Instead, focus on the joy. Focus on the fact that you are choosing to stick to your budget, and think about what this choice today means for your finances in the long run.
Use debt wisely.
While achieving financial goals typically involves paying down debt, there are cases where you need to use debt, and if you do so wisely and carefully, it can move you closer to your financial goals. For example, if you have a lot of high interest rate debt, it can make sense to take out a consolidation loan with a lower interest rate. Similarly, if you own a business and you occasionally have to use a business credit card to cover expenses, it may make more sense to turn to a revolving line of credit with a lower interest rate that offers the spending flexibility you need. Just be careful not to borrow more than you can pay off each month.
Focus on positive changes.
If you are having trouble implementing some of the changes you want to make to meet your goals, try to cast them in a more positive light. Find frugal habits that make you happy, and focus on creating positive changes rather than on stopping negative habits.
For example, if you are trying to give up expensive lattes, find a substitution that makes you feel content like having coffee (brewed at home) with your favorite friend or neighbor. Alternatively, if you are trying to ride the bus to work so that you can save money on parking or gas, focus on the benefits of public transit such as getting a library card and treating yourself to a “new” book. Reading a book or having coffee with a friend can feel like a luxurious new hobby, while trying to stop something you like can feel difficult. That’s why you want to focus on the former.
Armed with that advice, you are now ready to conquer your financial goals. Be detailed, make plans, but also, remember to make the process fun. Focus on what you are gaining rather that what you are losing, and let the good finances roll.