Ok, you might not like what I have to say in this conversation. But
I feel it's my duty to keep it real with you. So today we're talking practical money tips
in the form of 8 ways to improve your finances.
Now, why do I feel that I'm qualified to talk about this,
well I'm not a financial professional if that's what you're looking for,
but I am someone who is investing a lot of time into learning all I can about how to manage money.
Because I don't know about you, but I wasn't taught any of this in school.
And growing up I only understood the things that were told to me,
like: make sure you're putting money into your savings every month, or get a credit card,
because you'll need it, but don't forget to pay it off every month.
You see, I learned about money, the same way many of us learn about it.
By getting a job, receiving a paycheck, paying what I owe, saving what I can,
and then splurging on myself every now and then because I work hard, and I deserve it.
However, this way of thinking kept me stuck
chasing my own tail, living paycheck to paycheck, doing what most people do.
Understand your financial values.
Have you ever had a conversation with someone about life, and when you ask
them how are things going? Their immediate response is something along the lines of,
"well, you know, just trying to get ahead." Implying that they feel stuck or behind in life,
primarily financially or within their career which almost always
leads back to a financial status—wanting to make more, so they can try and get ahead.
See, when it comes to money, many people feel stuck simply because they don’t know
what they want out of life. And just trying to get ahead, if I can be honest with you,
is a pretty surface-level response that doesn't carry much value.
So if you're serious about improving your financial situation then find
an answer or answers to this one question.
What do you value more than anything else?
Is it quality family time, travel and adventure, living a debt-free life, more time to spend on a
creative venture maybe, escaping the corporate rat race, freedom, giving, and building connections?
Regardless of your answer, understanding what inspires you, your financial values,
what you want out of life, will without a doubt help you stay focused on improving your finances.
Embrace inconvenience.
Our society, as we know it today, is evolving rapidly—overnight it seems,
as technological advancements continue to promise and impress,
and our dire need to purchase convenience continues to grow.
And because of this, along with the extremely clever advertisements that
seem to know everything about us. It can be tempting to spend money we don't have,
to buy things we don't need, in an effort to keep up with convenience.
However, the price of convenience is beginning to knock on the door
of outrageous and if your primary goal right now is to save money
and improve your finances then I want to encourage you to embrace inconvenience.
Meaning adopt a DIY mentality and start doing things that may require a bit more work from
you in the short term, but are proven to help you save your hard-earned money over the long term.
For example, meal prep and cook more instead of eating out. Now to be fair,
you're still going to have to grocery shop smart. This means having a grocery list,
setting a budget, and checking prices. If you're not disciplined
about this, then you'll continue to waste a ton of money, trust me, I've done it.
Set S.M.A.R.T. and challenging goals.
In addition to understanding your financial values and starting to embrace inconvenience,
you also have set goals. Not just any goals,
however, S.M.A.R.T. and challenging goals that align with your financial values.
Let's break down what this means.
S.M.A.R.T. is an acronym for the following:
Specific, Measurable, Attainable, Relevant, and Time-bound.
Now, S.M.A.R.T. goals are different from regular goals. S.M.A.R.T. goals encourage you to turn your
aspirations into more actionable objectives so you can see the progress you've made.
This method gets rid of the vague parts of traditional goal setting by creating a structure
that translates to you actually achieving your goals. Here's an example.
Let's assume that one of your financial values is to live a debt-free life,
but you still have some unpaid debt that you need to take care of.
In this instance, what type of goal should you set that fits within this S.M.A.R.T. structure?
I'll show you right now.
Here's what your goal should say:
To pay off $XX,XXX.XX of debt by the end of _______ (MM/DD/YYYY).
Now how does this fit without our S.M.A.R.T structure?
This goal is Specific because if it immediately highlights exactly what you want. Remember,
the more specific you are, the greater the chance you’ll get exactly what you want.
This goal is Measurable because it's concrete and trackable.
"Pay off debt" is a statement that cannot be denied,
making it concrete. It's also trackable because it's attached to a dollar amount,
and as you pay more money towards your debt you can track your progress until it's paid off.
This goal is Attainable because it answers a very important question: can I achieve this goal with
the time and resources that are available to me? If not, what do I need to adjust?
This goal is Relevant because it's important to you and it's something you care about.
It's also in alignment with your values so it only makes sense.
This goal is Time-bound because it has an end date that keeps you accountable.
You see, one of the biggest reasons people don’t complete their goals is because they
don’t give themselves a target date to work towards. Saying you want to pay off debt,
and writing that goal down is a great start, but by when is the piece that makes all the
difference between a goal that might get achieved and one that will get achieved.
Now, why am I encouraging you to also make sure that your goals
are challenging? Well if you're serious about improving your finances
then you also have to be serious about challenging your own beliefs and current habits.
If you're not willing to step outside of your comfort zone
and challenge yourself to achieve great things, then you'll never achieve great things.
You see, building wealth doesn't happen by accident,
it takes hard work and discipline for starters, but that includes
challenging what you believe is possible so you can do what you never thought you could.
Refuse to finance...anything.
One of the biggest mistakes that you can make when it comes to managing money is thinking that
you can barrow your way into a better financial future and the honest reality is that you can't.
The only way to improve your finances is by eliminating your
debt and then refusing to go back into debt once you're free from it.
Now just a few moments ago, I was talking to you about challenging your beliefs and current habits.
This is the perfect example of what I mean by that because refusing to finance...anything is an idea
that goes against what many of us grew up learning and watching. It's the complete opposite in fact.
And since debt is so easily accessible and constantly being sold to us as something we
need in order to be financially stable or to enjoy life, it can be hard to believe
anything or anyone that says otherwise. But I'm living it, and you can still enjoy life and
create financial stability for yourself without borrowing just because it's available to you.
Fast-track your debt repayment.
As I just mentioned, eliminating your debt is a must if you want to improve your finances. So the
best way to do that is by simply doing a little math and seeing what your current debt repayment
schedule is versus what it could be if you put any extra money you have towards it every month.
Now, to do this you have to first determine how much extra money you have and can afford
to pay in addition to your monthly minimum. And you do this by getting on a budget,
canceling unnecessary subscriptions, and telling your money exactly where to go.
It's also important to note that turning your hobby into a side hustle,
or picking up a temporary second job are options you have to make more money
that will help you speed up your debt repayment.
Remember the goal is to improve your finances and having debt will without
a doubt prevent you from doing that. See, I never mentioned that this would
be easy. Nothing I'm sharing with you in this conversation is going to be easy.
But trust me, it's worth it when you commit to challenging your beliefs and changing your habits.
Discover the art of delayed gratification.
The phrase delayed gratification is often frowned upon, like
what do mean I can't have what I want now. Well, you can't, until you can afford it.
You see, I don't know what it is but the thought of having to wait
to get something you want doesn't sit well with many people. Maybe it's because we've
been conditioned to think that we can get whatever we want, whenever we want it because
we can quickly and easily finance it. But as I just mentioned earlier in the conversation,
if you choose to refuse to finance, which I think you should, then you don't have that option.
That means the only option you have is delayed gratification and there's absolutely nothing wrong
with waiting. In fact, I believe the process, the journey of saving and being intentional
and purposeful with your money until you can afford that thing you really want
is much more rewarding than buying whatever you want, whenever, on borrowed money.
And this might not surprise you, but usually, when you delay something that you really want
and enjoy, you tend to appreciate it that much more when you do finally get it.
Create and maintain a budget.
When you take the time to manage your money,
not only will your finances improve, but your financial confidence will too.
You see, having a budget can help ensure that you’ll always have enough money
to pay for your expenses. It will also expose your bad money habits if you have any.
Now, since we’re keeping it real, I’d like to share a quick story with you, if you don’t mind.
When I wrote my first budget, I had no idea what I was doing. Let’s just say the attention
to detail was lacking. However in that moment, when I started to write
down where my money was going, it was an eye-opening experience, to say the least.
Of course, I had my fixed expenses; rent, wifi, subscriptions, gym memberships. Things that didn’t
really change month to month, if at all. But when it came to those variable expenses, whew…
let me tell you. I had no idea how much I was spending a month on groceries,
eating out, shopping at random moments because I was bored.
See, budgeting, while it can be intimidating when you first start out,
is by far one of the best tools you can use to regain control of your money.
As I mentioned it will definitely help you improve your finances, but it will
also help you build financial confidence, which is a game-changer once you have it.
Have money saved.
The simplest way to improve your finances is by simply having money
in the bank. It’s mind-blowing to me how many people don’t have any money saved,
and this includes your general savings, your emergency fund, your sinking funds all the above.
Now really quick, I want to take a moment and talk to the 25-year-old watching.
I’m not neglecting everyone else, but if you’re somewhere between 23 and 35, I want you to hear
this. Because it might hit home if it comes from someone around the same age as you.
We have to stop pretending to have more than we do, by spending what we don’t have.
Roughly 50% of Americans have less than one month of their income saved.
That’s just mind-blowing, and we can’t blame anyone but ourselves.
So if you want to improve your finances, starting saving some money for a rainy day. 3 to 6 months
of expense to be exact. You have to, because if something happens, such as a personal emergency
or a National pandemic you’ll have what you need to take care of you and your family.
I hope shared something with you that really hit home and resonated with you.
And if I did, comment below what that was.
Keep growing, keep learning and always stay true to you.
I’ll see you in the next one.
Peace!