Personal finance is all about creating goals. Whether you have goals to pay off your debt or to save for retirement, it is important to stay motivated to reach those goals. The main reason why most people don’t reach their financial goals is because they lack the motivation. Motivation is the key piece to the puzzle. The question is, how do you stay motivated to reach your goals? Here are some tricks that will keep you on the right path.
Create Specific Goals
The biggest factor in not reaching a goal is because the goal was too general. Why do you think so many people fail on their new year’s resolutions? They create goals such as lose weight, learn how to save money, make more money, or pay down debt. While these are all good goals, they are entirely too general. How do you attain them?
Financial goals are no different than any other goals. We work toward them and hope that we can reach what we set out to do. The key to actually succeeding is to create specific goals. If you have debt, then how much do you want to pay off? Want to make more money, then how much do you want to make on a monthly basis?
The concept is easy for creating specific goals. When you create something you can see, then you have a much higher chance of succeeding. You should write down exactly what you want to achieve and a pathway to how you can get there. In other words, the more specific, the better.
Split Goals Into Milestones
So, you have your specific goals now and you are working toward them, but how do you stay motivated? If your goal will take you a long time to achieve and you know it, then you have to split up each goal into smaller milestones.
If you are working on paying off $30,000 of credit card debt, then that can take some time. Your specific goal is to pay off the $30,000, but staying motivated can be daunting. In order to make it easier to achieve this goal, you need to break it up into milestones. It is much easier to reach a milestone of $5,000 than the $30,000. As you get closer to the milestone goal, then you will keep yourself emotionally motivated. Finances are just as much emotional as they are mathematical. Milestones will ensure you stay on the path toward reaching your goal.
When I was trying to pay off my credit card debt, my goal was to get my balance to zero. I wanted it to happen right away. But, paying off my $10,000 of debt wasn’t going to happen overnight. There were times I lost my motivation. I wanted to do other things with my money instead of paying off my debt. But then I started to set milestones. The first was $7,500. Once I hit that, I had a new rush of motivation to hit $5,000. When I hit that milestone, again, a surge of motivation overcame me.
As I hit each milestone, I became more and more motivated to pay off my debt. Without the milestones, I too would have given up.
Celebrate Your Milestones
This is one of the more important aspects of keeping yourself motivated. You have made specific goals and then broke those up into little milestones. You have already given yourself a much better chance of achieving your overall goal. Now, in order to stay motivated toward the end goal, you must celebrate your success.
With each milestone goal, you should also create a celebration plan. Yes, when you reach your first milestone, you need to celebrate. The best way to stay motivated with any goal is to celebrate your achievements. The key to celebrating is to make sure that you don’t go over the top. For example, if you have a goal of paying off your debt, then it would be a bad financial move to rack up more debt when celebrating reaching one of your milestones. A celebration can be something small, like going out to a movie or out to dinner. Maybe you could even have a little weekend trip to somewhere local. You aren’t paying much for the goal, but it will give you a renewed sense of achievement.
When I was paying off my debt, just hitting my milestones was motivation enough for me. But when I was looking to lose weight, I had to celebrate those milestones. When I reached the halfway point of my goal – my milestone – I celebrated by getting a massage! I knew if I reached my goal I could treat myself with another massage! It was something small that cost me a pound or two in the moment, but it was the reward I needed to keep pushing forward.
Your finances are entirely personal and that requires you to come up with how you want to make and achieve your goals. It is important to remember that you have to create specific goals, break those goals up into milestones, and then celebrate your milestones. These steps will ensure that you stay financially motivated. Saving for retirement, saving for a home, and paying off debt are all great goals that can be achieved when you make them specific and stay motivated.
Author Bio: Jon writes at Money Smart Guides, a personal finance blog whose goal is to help readers get out of debt and start investing for their future. He has written an eBook, Spare Change: Adding It Up Can Change Your Life, that provides over 150 ways to slash your expenses to save more money or pay off debt more quickly.