Tag: budgeting

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Finances

Try These 3 Tips Before Giving Up on Your Money Goals

Think about the money goals you set in January. Remember how excited you were to have a plan to get out of debt, save for that big trip, car, or house? You were so excited to finally see financial progress, that you welcomed the challenges and sacrifices required to achieve those goals. Turning down those random trips felt easier and cutting out fast food purchases, a breeze.
But now we’re a few months in, and keeping up this strict behavior to reach your goals is starting to feel impossible. Or maybe you’ve put in the work, but circumstances beyond your control have set you back.
How do you motivate yourself through times of stagnation?
Let me show you how I deal.
I’m in year 2 of a 3-year journey to pay off $180,000 of student debt. To reach this goal requires me to be very strict with where my money goes. Most “treat myself” spending is out the window. I have very little room for random trips, fast food stops, or anything random for that matter (you’ll be surprised at what you can accomplish when you’re just more purposeful with your money). Needless to say, this behavior isn’t easy. But with the grace of God, I made it through a full year.
At the end of year 1, I knocked out $80,000 in student debt. I celebrated, patting myself on the back, because it felt like a HUGE accomplishment. But the excitement soon left as I thought, “Man, I have 2 MORE YEARS of this?” The thought of 2 more years of living on such a tight budget felt impossible, and I started to question if it was even worth it.
But giving up is never an option for me (confessions of an overachiever!), so I had to (and continuously have to) find ways to motivate myself, and refocus.
Here’s what I do:

#1 I focus more on why I’m doing it

I’m pressed to pay off $180,000 in 3 years, so that I can be free of debt before my husband and I grow our family. The money that is currently going toward my debt would be much better served going toward our children’s tuition and other family savings, especially investments.
I also need to be debt free for our long-term goal of being financially independent. This is the point where we’re able to live off of the interest that our money earns (from investments). We want to be able to give, travel, and enjoy life without being set back financially or worried about making ends meet.
Focusing on why I’m doing it gives me the will to keep fighting for it.

#2 I remember how far I’ve come

Year 1 of my student debt journey may have been hard, but when I look at the result, it was well worth it! Before year 1 I owed $180,000. After year 1 I owed closer to $100,000. This was progress, and I needed to focus more on that progress.
This isn’t too hard to understand, right? Focusing on the progress you’ve made makes you feel good, like you can do so much more (which you can!). And focusing on the difficulties makes you feel bad, and you ask yourself, “Why would I go through this again? Maybe this isn’t for me.” You and I both know where we need to place our focus 🙂 .
Remembering how far I’ve come feeds my momentum, as I push through.

#3 I identify the main barriers holding me back, and I adjust

It’s great to focus on my year 1 progress, but I didn’t want to completely ignore what made it so tough. If possible, I want to make these next 2 years easier, to increase my chances of sticking to my goal.
One of the tough things about year 1 of my student debt journey was balancing my student goals with my contribution to our family goals. I don’t want my marriage feeling the burden of my student debt goals. Given how hard my husband, Tyrone, and I work, I want us to be able to do some of the things we love (and need) to do to enjoy ourselves.
To help with this balance, Tyrone and I sat down at the end of 2014 and planned out our 2015. We talked through any major trips we’re hoping for, as well as our expectations around “date nights,” dining out, and other regular spending. Thinking about these things ahead of time, gave me a better idea of how much to set aside regularly, so that it wouldn’t be a constant fight between what goes toward my student debt and what goes toward our other goals. I now have regular amounts going toward our emergency fund, travel fund, and other items we aligned on. And yes, it required that I slightly decrease what goes toward my student debt, but it’s more realistic, which means it increases my chances of sticking to it!
Addressing and adjusting for my barriers increases my chances of success.
I used my personal journey just as an example, but I encourage you to try these same 3 tips before you give up on your money goal(s):
1. Focus on why you’re doing it
2. Remember how far you’ve come
3. Identify the barrier and adjust for it
Remember, “slow progress” is better than “no progress,” and “no progress” is simply an opportunity to adjust. You can make it happen!
P.S. If you’re on your own student debt journey, I encourage you to download my free toolkit that helps you set a strategy, find more money to put toward the student debt, and track your progress.

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Finances

5 Money Phrases to Retire (for Greater Financial Increase in 2015)

I love the New Year, especially as a coach. I really enjoy hearing about people’s 2015 plans for their money, and nothing makes me happier than seeing people achieve those plans!
But what breaks my heart is seeing financial goals pass like many other resolutions. I never want people to stay in the same place, when I know they deserve financial growth.
Those who struggle to see growth may have very complex situations outside of their control, but the majority of them are married to one or more of the below excuses. But I’m here to retire these phrases in 2015. I’m retiring them, so that you can see greater financial progress in 2015.

#1 “A budget is not for me, it’s too restricting”

The popular misconception is that living on a budget is limiting. I usually hear it right before they say, “I want to enjoy my hard work”. And I totally get it. We work hard Monday through Friday, so who wants to limit their spending after all of that? Well I’ll tell you who, people who want to have money!
Budgeting does limit what you spend, but it limits what you spend so that you’re sure to spend on things that will make your future easier (savings and investments). What you don’t want to do is enjoy all of your hard work now, and have to work even harder when you’re older and ready to retire.
Instead view your budget as a means to get you to a brighter future (here’s a free one for you to try out).

#2 “I don’t have enough money to save”

The beauty of budgeting is that it allows you to know where you’re money is going, so that you can make sure some of it goes toward healthy items, like savings. If you don’t budget, you end up spending on other stuff, and you never will have money for saving.
Those who save aren’t able to because they have a lot of free money lying around. They’re able to save because they force themselves to. They spend less in other areas.
Realizing the control you have over your money, and the control you have to exercise over your money will open the doors for financial growth.

#3 “Don’t worry, it’ll just work out”

This is probably one of the worst phrases you can say about your money. And it’s not an attack on faith. Trust me, I know that God’s mercy, grace, favor, and purpose for my life is the ONLY reason why I am where I am. But I also know that God is not an ATM that gives funds at your request.
Either I can wait for God to work it out while I continue to spend frivolously with no regard for my future, or I can take the steps necessary to make sure that when He does it, I’m ready to receive it. I choose the latter every time. I take the steps in the natural to show God that He can trust me with a little, and however much more He wants to bless me with in the future J.
There’s nothing wrong with having faith that God will work it out, but we must align our actions with our faith.

#4 “Yea, I can loan it to you”

I know this one is tough for a lot of people. Kind, compassionate hearts want to help everyone who is in a bind, but if it consistently stops you from reaching your goals, you have to learn to say “no”.
This is especially true if you’re a first generation game changer. If your parents and parents’ parents struggled living paycheck to paycheck, you have a lot of pressure. But be wise in how and how often you help because you have the opportunity to significantly shift finances for future generations. Someone has to break the cycle.

#5 “But I want our kids to have more than what I had growing up”

We all want our kids to have a better future. But what does that look like? Is it more and better clothes, shoes, games, phones, jewelry? Or is it educational funds, savings accounts, and the opportunity to not have to go into debt? New things aren’t bad, but you don’t want to sacrifice their future for their right now. And it’s extremely important to teach them what to value (the younger the better!).
Make sure some of the spending on your kids is toward financial goals that will teach them strong money values and give them a more promising future (see 5 Lessons to Teach Our Kids About Debt).
2015 can be an awesome year with a plan. If you don’t yet have one, see how I can help!

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Finances

5 Ways to Help Your Wife Who Loves to Spend Money

I write quite a bit on the importance of budgeting. You budget so that you can free up money to save, invest, and/or put toward other financial goals. I even told a story of two types of spenders: one who plans ahead and the other who spends it all (check it out here). But I’m often asked, “What do you do when you plan ahead, but your wife spends it all?”
So here are five approaches you can use to help your wife who loves to spend:

#1 Start with realistic expectations

Let’s say you’re used to saving 50% of your income, while your wife saves 0%. Your goal may be for your household to continue that 50% savings rate, but it’s not realistic…at least not immediately.
Right or wrong aside, it will be difficult for your wife to make such drastic changes in spending habits overnight. This doesn’t mean you lose sight of the goal, but it should encourage you to set smaller milestones. These milestones are what you’ll want to communicate to her.

#2 Be as specific as possible about your budget

If you’re wife is a big spender, chances are she rarely had to think about her spending throughout her life. Going from not thinking about her spending, to knowing exactly how much to cut and where, can be overwhelming.
Instead of giving her the heavy task of “not spending so much”, make it clear. Have an idea of where she overspends and by how much she can cut back the next month, or next year. You can then communicate a more specific plan to your wife.
For example, “instead of spending $500 on dining out next month, let’s target $300. This would be about $75 per week”
Your wife now has a clearer idea of what she can do to cut back her spending on dining out. When you have a clear goal, you have a greater chance of achieving it.
Learn more about how to track your spending and how to cut your spending.

#3 Shift the focus from right now to the future

The ideas of saving and investing are all about the future. They require up front sacrifice, but the sacrifice is worth it because the savers/investors remind themselves of what the future will look like once they succeed.
Big spenders, on the other hand, spend the way they do because they’re focused more on the present than the future. They spend money on what will make them feel good now, and the future is “out of sight, out of mind. But you can shift this thinking by painting a clear picture of what you’re future could look like, and reminding her of this future as encouragement. Remember, clearer goals are more attainable.
This of course assumes she shares your financial goals for the future. If she does not, then you’ll want to shift your focus to aligning on a set of goals with your wife.

#4 Speak to her insecurities

Retail therapy is no joke. Many spenders purchase their way into confidence and status. What drives your wife’s spending? Did she grow up poor, and now makes every attempt to have nice things? Maybe she grew up in a household where if you didn’t have certain things, you were less than. There are a lot of insecurities that can drive our purchase decisions. You’ll want to understand these, so that you can address them appropriately (even if it’s not through direct communication).

#5 Make it fun, reward yourselves (frugally!)

Most of us make more progress when there are small rewards along the way. And for larger goals that require years of discipline and commitment, you’ll want to throw in a few goodies to celebrate progress and encourage perseverance.
The point is to understand what drives your wife’s spending behavior, give her a clear idea of what she can do to help your household reach your goals, and make it a little fun along the way. Remember to give her a little room to make mistakes, and watch your path to financial freedom get a lot smoother.