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This is a process. Just let that sink in for a minute…
Are you getting it?
Let me say it again: This is a process!
If you are currently in debt and living paycheck to paycheck then it will take TIME to go from working for your money to making your money work for you. Getting rich is never quick, and if you do get rich overnight then watch out because easy money is easy to lose.
So what is the process? I’m so glad you asked!
Step #1: Educate Yourself!
I will probably say this one over and over again. You HAVE to educate yourself! If you skip this step then you will end up making some BIG mistakes, especially when it’s dealing with investments.
Aside from making major mistakes, there are numerous paths to financial wealth. It is wise to review as many paths and ways as possible so that you can figure out what works well for you.
For example, some people cannot use credit cards because they aren’t disciplined enough to stop “swiping.” So they use the cash envelope system
and leave their credit cards at home.
Others are able to keep track of every penny and are disciplined enough to keep from using their credit card more than they should. They are also very thrifty and able to use their rewards points to get cash back or free items. These people use their credit cards on EVERYTHING.
Still others will do a hybrid in which they use both cash on some categories of their budget and then they use their credit cards on others.
You may find that for a time you’ll need to use only cash in order to get your spending under control. Once it is controlled then you’ll be disciplined enough to use only credit cards so you can make money on all your purchases. This is what we ended up doing.
Step #2: Set Goals
I used to be the kind of person who hated it when someone told me to set goals. Why? Because I would set a goal and would end up getting burned out before I could get to it. I just didn’t believe that it worked.
Then a friend of mine who was a cross country runner one day agreed to coach me in running so I could have a healthier life. As soon as we started running she gave me the most incredible advice in running that I now apply to all aspects of life: “Set short term and long term goals.”
She explained to me that it’s a good idea to set a long term goal such as running for at least 1 mile straight, but you also want to set a short term goal like “I’ll focus on getting to 1/4 mile and then after that I’ll focus on the next 1/4 mil…” and so on and so forth. This way, instead of focusing on getting to a mile and tiring out before then, you can focus on your short goals so that every time you make it to those goals you feel good for accomplishing something. This is especially important to do when you start to get tired.
This is something that has really helped me with my financial goals. I set short term ones like “this month I’m going to pay off at least $500 of my medical bills.” If I’m able to pay more it gives me a boost and a reason to be proud of myself. But I also set a long term goal like “We will have all of our medical bills paid off within 6 months.”
Another thing that also helps is keeping yourself accountable by posting your goals on facebook, twitter, G+, or on your blog like I’ve done. Then you can update everyone every time you put money towards your debts. This adds an element of pressure to your goals so that it motivates you to reach them instead of changing your mind later.
Step #3: Create Good Habits and Drop Bad Ones
This one, as most of us know, is very difficult. I remember when hubby was in Iraq and I realized that I had to break bad habits and start good ones. I hated every second of that process!!! But you know what, it was worth it!
What are your bad habits? Are you spending more money than you should? What is it going to take to get that spending under control? Once you come up with a plan then focus on changing that habit no matter how many times you mess up. Figure out what your triggers are so you can avoid them. I had to stay away from any mall for at least a year before I felt confident to go to one without buying anything (including food).
Step#4: Be Realistic
Don’t set goals that are way out of the ballpark. If you are just now realizing that you need to get your spending under control then don’t set a goal that says you have to be able to keep track of every single penny by the end of the week. Keep it simple. Make very small goals you’re sure you can reach and then when you master those and feel confident to make those goals larger then do so.
Also, give yourself some grace: it’s ok if you don’t reach every single goal. You’re not a failure if you slip up every once in a while. Failing is quitting, so keep trying until you get there. NEVER quit!
Well, that’s all I have for now. So don’t forget that it’s different for everyone and what I have here may not be exactly the same process you’ll have to go through. Just remember that it is a process and will take TIME so don’t get frustrated if within a few months you’re still not rich. Be patient!!!
Do you have anything else to add here? Some extra advice? Let me know in the comments section.
Next time we’ll be talking about Getting Your Priorities Straight.
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Great tips – I have made it a point to just not go shopping. If I must shop for something, I make a list and stick to it! I also learned years ago that if you bring one bag of stuff “in” the house, you should take one bag of stuff “out” of the house – that sort of kills the urge to shop! :0)
Great tip Tracey, thanks for sharing!