Taking Baby Steps Towards Financial Goals
I’ve received numerous emails from readers asking about how challenging it is to achieve their financial goals because of various circumstances. No matter the situation, there are two ways to look at it, either the good or the bad of the scenario. Focusing on the positive will help motivate and perhaps lead to progress, while focusing on the negative will simply dig the hole deeper. Seems like pretty common sense stuff, but it can be challenging in practice.
Do you have major credit card debt? Seems impossible to get out of it? Simply focusing on quickly paying off a $50k debt pile may seem unrealistic, and it probably is. The key, in my opinion, is to take baby steps towards the end goal. Can you budget so that you have more cash flow to put towards the debt? How about consolidating to reduce the interest rate? How about paying off the smallest balance first to keep you motivated? Set smaller goals towards the larger goal and soon the larger goal will be in reach sooner than once believed.
When my wife and I graduated from University, we had major debt. We set a goal of paying off all the debt in a short period of time, so we lived frugally and looked for ways to increase our income. We tackled our highest interest rate debt first, and gradually paid off all of our debt in about 3 years.
Another personal example is my Million Dollar Journey. To some people, achieving a million dollars in net worth in their 30’s is “impossible”, but to others, it’s simply another milestone. I want to be a millionaire in a short period of time, but that’s pretty far out there from where I stand today. So what am I going to do? I’ve set smaller financial goals while tracking my progress along the way. The strategy of setting smaller realistic goals has worked for my previous debt, annual savings, my income, my business growth and soon my net worth.
Think big, but set realistic goals along the way. The key is to believe that your goal is possible which is why it’s helpful to take baby steps towards your end goal.
Do you use a similar strategy for your goals?