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Earlier this month, we shared some ideas for financial resolutions to set for the new year. Once you’ve identified your specific goals, the next part is where the real work lies - achieving them!
If you're not sure how to put these goals into motion, this week’s blog post is equipped with a step-by-step process on how to work your new financial goals into your budget to give you the best chance of success.
Keep reading to discover the key steps in our roadmap to smashing your financial goals.
Step One) Create a Budget
The first and perhaps most important step of the roadmap involves creating a budget.
A budget is necessary to get an honest idea of where you currently stand financially and allows you to identify any room for improvement.
For example, is there anywhere in your budget where you could cut costs to make your goals more achievable - possibly by reducing your food bill or cancelling subscriptions you definitely don’t use as much as you thought you would?
Audit your finances by taking a good look at your transactions over the last 3 months and tailor your budget accordingly.
Step Two) Identify your Goals
Once you’ve identified your goal, you’ll want to make sure it’s measurable - and you can do this by following the SMART method for setting goals.
SMART is an acronym that stands for:
Specific: Is your goal specific?
Measurable: How will you measure the progress of your goal?
Achievable: Is your goal attainable?
Realistic: Is your goal within reach and relevant to your overall goal e.g. financial freedom?
Timely: Does your goal have a clearly defined deadline and timeline?
Categorise your financial goals into short-term, medium and long-term and make sure they’re specific so that you have something concrete to work towards.
For example, instead of thinking “In 2022 I want to save more money”, you could re-phrase this as “In 2022, I will add an extra £50 to my savings each month until January 2023”.
Step Three) Create Mini-Goals
Setting some mini-goals for you to meet along the way will not only help build some momentum but will also make the bigger goals (like getting out of debt), feel less daunting.
Breaking down your goals into actionable steps has been proven to drastically increase the chances of you achieving whatever it is you’ve set out to do - so if being debt-free is your end goal, break it down into smaller, easier steps.
For example, let’s say during the first month, you pay just the minimum amount due on your credit card. Then next month, you pay slightly more, and so on. You could also try the debt avalanche or snowball method - whichever works for you!
Step Four) Celebrate Each Milestone
Last but definitely not least, celebrate each milestone until you reach your goal or goals.
Praising yourself for the small wins will help you stay motivated, and if you reward yourself (or give yourself a reward to look forward to once the goal is accomplished), you’ll actively make more of an effort to achieve them.
The celebrations don’t have to be pricey, either - maybe you treat yourself to a cosy night in with a movie and popcorn, or a relaxing at-home spa facial. You could always find ways of increasing your income too so that you reach your goals faster!
Read our blog for tips on how to find your ideal side hustle.
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Post inspired by @findingfinancialfreedom_