Tag: financial goals

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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 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.

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Finances Marriage

3 Ways To Stop Living Paycheck to Paycheck

When I graduated from college, I made $30,000 a year, owed $60,000 in student loans, and was not able to make ends meet. I graduated top of my class in high school, went to a top university, and there I was…young and broke. You know the saying, “…when you find yourself with more month than money”. Yea, that was me. I was in that paycheck to paycheck rut.
But by the grace and favor of God, I learned to break the cycle and master my money. I make more now than I did as a recent grad. But more money alone didn’t break my paycheck to paycheck cycle, and it won’t break yours. The 3 steps below will.

1. Know where your money goes

One of the worst things you can do is fall behind on your bills and obligations, especially when you’re young. Late fees and interest (on debt) will make sure your paycheck stays consumed by bills. And when all of your money is spent on bills, you won’t get ahead. So your first priority is to make sure you don’t fall [further] behind.
But many of us don’t even realize that we are behind, and you won’t realize it until you know where your money is going.
The concept is simple: subtract your monthly bills from your monthly income. What’s left is your “free spending” money. If what’s left over is negative, you owe more than you actually make each month! You’re in the hole and need to do whatever necessary to dig yourself out. For me, this was getting a second job to help close the gap, until I could figure out a longer-term solution. Back then, that solution was to make more money, but I quickly found that more money wasn’t the answer.

2.  Aim to spend less, while working to make more

More money helps, but if your spending grows right along with it, you’ll continue to live paycheck to paycheck. I’ve been there! Within 6 years of graduating my salary more than tripled, but so did my expenses and debt. Needless to say, I saw the same struggle.
Breaking out of the struggle is less about how much you make, and more about what you do with what you have. If all of your money is going toward bills, or groceries, or entertainment, or any other item not helping you break out of your struggle, you need to cut back. Cut down to those items that you truly need. Ask yourself what are you willing to sacrifice now for a better future?
If you know where your money is going (from step #1), it’s easier to know where you can cut back. Track your “everyday” spending in addition to your monthly bills, and you will be surprised at what you find. You’ll see how those trips to Target and McDonalds add up!
For me, this was getting rid of cable, cutting back on other entertainment, hair products (#teamnatural!), and food, food, and more food.

3. Put the extra money towards things that will keep the cycle broken!

Cutting back is not fun or easy. I get it. But it gets easier when the money goes toward a better future. Getting rid of cable, so you can pay the light bill isn’t as fun as getting rid of cable, so you can build up your travel fund.That’s why #2 is so important. Minimize your bills so that your money can go toward things that allow you to do more, without being set back.
I cut back severely to save for our wedding, and we paid for it in full. I’m still on a tight budget to pay off student loans. I’ve set goals to make my future easier, but it requires I sacrifice a little right now.
As we get older, we want to do more stuff and enjoy life more. Think now about some of those things you’ll want to do in the future. Reward your future self with an emergency fund, a shopping fund, investments, and other financial goals that will make your current financial struggle temporary, breaking the paycheck to paycheck cycle.