How to ACTUALLY achieve your financial goals

Let’s get you to your financial happy place.

there’s the spot…

Whether it be paying down debt, increasing savings, or just not letting money be the party pooper of your life any more, here is a method I use when working with clients to get them to their goals. It is based in well-researched behavioral psychology, that will greatly increase the likelihood you'll get to your goals.

We have great hopes for next year. Or maybe mediocre hopes since 2020 really set the bar pretty low. Chances are you are thinking about what you can do in 2021 to lead a better life - and money is often at the top of the list.

The problem with most New Year's Resolutions is that we set ourselves up for failure by creating huge goals which require daily effort we were never willing to do previously, but we think the new year puts invisible fairy dust on our wish. This time it’ll work. Because it’s a new year and new me - right?! Well, by the Gregorian calendar, it’s certainly a new year. You? You’re the same wonderful, fun, and fallible person you’ve always been. (I’m taking a bit of a leap of faith here, I don’t actually know you but if you’ve found your way here, chances are you’re pretty cool.)

Get meaningful, lasting, and true change to your finances  so you can lead a more joyful and financially stress-free life by following these steps.

1:

You don’t just want money,

you want what that money can get you.

The first thing you want to do with your financial goals is to dig in and figure out what it is you actually want. My clients often say things like “more savings” - - but why? WHY DO YOU WANT MORE SAVINGS? What will that get you? How will your life be different?

Think about it this way - we work out not because we love running on a treadmill for half an hour just to go nowhere or because we have so much free time; we work out because we want to feel better about ourselves, sexier, stronger, fitter, and have more energy. 

Same with money goals.

Instead of just saying “more savings” connect that idea to the thing you really want, a feeling, an emotion. Some kind of psychological salve. Probably something to do with freedom, relaxation, peace, security, joy, etc. Possibly also sexiness. You little tiger you.

When your goal is "pay off debt" or "have an emergency fund" it's not that you WANT to give your money to your lenders or spend hours calculating a budget in Excel. That's not motivating.

What is motivating?

• Paying off debt will give you a feeling of freedom; that you can breathe.

• Having an emergency fund will give you a feeling of security; you'll be able to sleep better at night knowing that life can happen and you’ll be able to get through it without stressing. 

Once you've pinpointed how it'll make you feel when you achieve your goal, make it come to life. Imagine your day when you have this. How is it different? Are you nicer? In a better mood? Is life easier? Do you have more time/money for hobbies? What changes in your relationships? The clearer a picture you paint, the more you’ll want to achieve it. 

A simple way to do this is to ask yourself “why” over and over until you get to the core of your reasoning.

• I want more savings. Why?

• So I can have a sense of security. Why?

• So I don’t have to worry about the ‘What if’s’ in life. Why?

• So I can sleep better at night knowing I’m prepared for anything life can throw at me. Why?

• Because I’ll finally be well rested and feel better during the day, be more productive at work, get more done at home and have a sense of fulfillment.

Now that we’re headed in the right direction, on to step two.

2.

Set achievable, realistic goals

My quarantined, ever-expanding tuchus isn't going to be able to run a marathon come spring when I've been averaging 5,000 steps a day. But it could do a 5K.

Looking at where you are now and keeping your eyes on that new life you've imagined, where can you realistically be in six months? 

Six months is a good time frame to use because it’s far enough away where you can get a lot done, but still close enough where it feels real. (Unlike retirement which most people don’t realize is “a thing” until they’re somewhere in their mid-fifties and have lost thirty years of saving)

Using our above examples, you decide you can realistically pay off one of your credit cards or save $3,000 towards your emergency fund by June 30th. Yay!

Once you do have a realistic goal in mind, WRITE IT DOWN. Use real numbers and firm dates, not just “pay off debt” but rather, “Pay off $2,000 of credit card debt by June 30th”

3.

Put yourself on the road to success

It'll take a while to get there, but as long as you're putting on foot in front of the other, you'll make it.

People tend to fail at goals because they’re too big. But you know what we all do, every day, without really thinking about it? Brush our teeth. Because it’s just routine. That’s what step three is about. Make a tiny action routine.

You’ll be much more likely to succeed if you aren’t relying on huge, fairy-dust infused changes, but rather focus on having consistent, regular as clockwork, tiny actions that you can easily work into your normal routine.

The trick to making tiny actions routine? Simplicity and celebration!

• Have a set time and place to get it done - everyday. When is a good time for you to do a bit of work on your money? While you’re having your morning coffee? During your first break at work? After lunch? While dinner is in the oven? It shouldn’t take more than 10 minutes - remember, you want tiny, regular as clockwork, changes. This is your time, every day, to get the tiny action done.

• Do the tiniest action possible - everyday. Aiming to pay down debt? You may think the first step is writing out the balances and minimum payments of all your debts on one sheet of paper. BUT WE WANT TINY ACTIONS - MAKE IT TINY!

  Instead, on day one, get out that piece of paper and write “Balance”, “Minimum Payment”, and “Interest Rate” at the top of the page with a line under all three. Done. Really. That’s it.

  Day two? Enter in the data for one credit card.

  Day three? Add another debt’s data. By the end of the week, you have (or will be well on your way to having) a full list and it’ll have been no sweat. TINY movements are do-able and add up!

• Celebrate - everyday. Once you’re done with your tiny, consistent, regular as clockwork action, recognize you did something great!!! Remember, we’re motivated by emotion. By celebrating, you are wrapping a little bit of dopamine around a task you otherwise aren’t looking forward to. When you attach the dopamine, though, you create positive emotional attachments to the task and will start to look forward to it. This can be anything - listen to some badass Salt-N-Pepa encouraging you on (or whoever makes you happy), do a little dance, give a high-five to the previously sleeping cat. You may feel silly, but that’s fine! As long as it makes you happy, it’s working.

To recap, this is my recipe for financial success in 2021:

• Step one: paint a vivid picture of what your life will be like when you have achieved your goal

• Step two: set realistic, achievable goals with a due date

• Step three: make it routine. Every day, at the same time, do one, tiny action and celebrate after.

Setting up your goals this way will, scientifically, set you up for success in your goals. As I always say, if it were fun or easy, you would have done it already. Don't wait for fairy dust.

If you want a place to ask your money questions, have me personally cheering you on, hear others' stories, or just work on becoming a money nerd with humor and zero judgement, join the Facebook group Scrimpin' Ain't Easy

Cheers,

Ms. Moody