Reach Your Financial Goals This Year

The following rules will apply regardless whether you're a single mom or a family of ten. I'm going to show you how we managed to save enough money to retire early even when it looked impossible.

Rule #1 Decide on a goal.
This is the only rule in which all parties must agree.
Whether you want to save for a college fund, a new home, or retirement, it must be the goal of everyone involved.

Rule #2 Decide on a deadline.
I don't know about you, but nothing gets me motivated like a ticking clock--or in this case a ticking calendar.

Now. Discuss both these items thoroughly. Is it a worthwhile goal? Is it a doable timeline? Make sure everyone involved agrees to the first two before you move on. It's important to have that commitment.

Rule #3 Break down your benchmarks.
Say your goal is a house of your very own. After you've crunched all the numbers, you decide that $40K is the down payment you need to make that happen. It could be any number but for the sake of argument let's choose 40K. Your first step is to figure out how much time it will take you to save your goal amount.

I know you're hyperventilating right now, but trust me, it's totally doable. We'll be breaking down this goal into smaller bites.

Rule #4 Attack your mini-goals.
Not everyone can pull 40K from their back pocket, but most of us can squeeze $10-15K in a year. If you think you can't, tally up all those lunches, coffees, gadgets, trips, and toys you've bought in a year. The total might surprise you.
If you really want to be efficient, record all your expenses for a year. We do this every few years just to make us accountable for what we spend. When you tally the non-essentials you're going to need smelling salts. Most of us never realize how much money we waste on things that don't matter in the long run.
As soon as you've decided on your goal, no matter what it is, don't think about the big number you need. Focus on the little numbers.

How much can you save in a year? Start there. For the whole year, you're going to do nothing but focus on the first bite of that apple.

Rule #5 Make an inspiration board.
I've never been a fan of inspiration boards, but I know a lot of people who swear by them. It's especially useful when you want your children to pull their weight. If they can see why you're saying no to new clothes or gadgets, they won't bat an eye because they know it's for a good cause. They're also brilliant sergeants in patrolling how you spend money.

We tend to hear a lot about spoiled kids, but kids are the best for keeping you honest. They KNOW when you're trying to do what's best for them. You can't hide anything from a kid. That's why it's important they understand that what you need as a family will take time, but not a terrible amount of time. Trust in your kids. They will help all they can.

Rule #6 You're not being deprived, so don't go there.
I'll tell you a secret. 50 years ago, we were taught not having food and shelter was deprivation. You are not deprived.

What you might be feeling is envy because you're comparing your stuff to what your friends have. Don't do that. Don't get hung up on what other people have. That's a sick mentality fed by social media and retailers.

Rule #7 Don't cheat on each other.
Hiding a bill from your significant other is just like cheating on him. Not only is it dishonest, but it's counterproductive. If you truly want to achieve the goal of financial independence, you have to lay your cards on the table and play your hand all the way to the end. That goes for everyone involved.

Rule #8 Touch base regularly
Make a weekly commitment to go over your bills and your savings to see how you're doing. Knowing where you're at financially and in which direction you're moving is a good way to keep up your momentum.

What's your big financial goal? Home, education, retirement? Do you have a plan in place to make it happen?

Big dollar investments always make me cringe, but believe me, it's doable if you keep at it. The funny thing about saving for a goal is that the closer you get, the faster it happens.

In the early 80s when our take-home pay was very much smaller, we once socked away over 20k in a year (for a down payment on a house) just by living below our means. Hand-to-heart, it got so easy living below our means, we just kept doing it the rest of our lives.

What's your big dream goal?


Great ideas here, Maria! I always count myself lucky that my husband and I are pretty much on the same page financially, and if/when we're not, we manage to get there relatively quickly. :)
Angela Brown said…
Re: They’re also brilliant sergeants in patrolling how you spend money.

My daughter is this for real lol! When we decide that we want to do something, like take a trip to Dallas to visit the zoo and aquarium, I let her know that we will want to set a few dollars aside here and there so the trip is paid for when we go. She will gladly stop me and say, "We don't need to eat out tonight, Mom, cause we still have that roast left over."

Now that I am about to start paying tuition for her private school, I have some budget reviewing ahead to stay the course and carve out those saving moments so they become habit.
Maria Zannini said…
Madeline: It might surprise you how many couples lead very separate lives when it comes to finances. It still shocks me even though I know many of them personally.
Maria Zannini said…
Angela: This doesn't surprise me in the least. When we were little it would never occur to us to ask for toys or feel bad there was only one group present for Christmas. Times were tough and we knew our parents were doing the best they could.

Kids are so perceptive. They know far more than they let on.
lynnviehl said…
I'm not sure what an inspiration board is, to be honest. I have a corkboard by my desk where I've pinned pictures of the kids and my guy, to remind me that I work for more than myself, so maybe that's one. On it also hangs a little bag with the remains of two credit cards, which I cut to pieces after I paid off the last of my personal debt. That's another reminder, to stay out of debt. If I can't pay cash for it, I don't get it.

My guy and I both grew up poor, so being frugal is ingrained from childhood. Saving most of our income while staying out of debt have always been our primary goals. We may not have gone on any fancy vacations, driven expensive cars or dressed like celebs, but we own everything we have. We also didn't have to take out student loans to put the kids through college. Our youngest will graduate in a year totally debt-free -- and that has always been my biggest dream goal. :)
Maria Zannini said…
Lynn: I wish I could make you the poster child for how education costs should be handled. Your daughter will thank you in more ways than one.

re: inspiration board
I don't know who invented the concept but it sounds like something Oprah would recommend. :) Basically, you're supposed to pin pictures or quotes that visualize what you want to achieve. I think your way sounds much more relevant though.

Knowing why you're doing something is more important than a picture of an expensive house.

For us, we moved so far away from family and friends that we were virtually on our own. It was either sink or swim.
Jenny Schwartz said…
LOL Inspiration board reminded me of those messages people tape to the back of their toilet door so that they see them every day ... although I'm not sure if Americans have separate loos as opposed to toilet-in-the-bathroom as older Australian homes do. so my comment mightn't make sense!
Maria Zannini said…
Jenny: We call the the lone toilet a 'half bath'. Most large homes have both.

Sometimes I want to leave a little sign next to one toilet that tells the occupant to lift up on the handle.

Most toilets pull down to flush, but I have one where you have to lift up.
lv2trnscrb said…
This advice needs to be given to newly engaged couples. It sure is easier if both are in agreement with how the money will be spent and saved; avoids trouble down the line. All excellent advice!

Maria Zannini said…
Betty: Sadly young people don't think that far ahead. We were hard up as most newlyweds are, but for some reason we snapped to our senses early on. My #1 goal was to get out of debt. It made a huge difference after we reached that goal.
Michael Keyton said…
Frugality's inbred, though after years of it I flirt on occasions with the dark side ref small affordable luxuries. I remember as a student making a cup of tea last for an hour or more in a cafe because drinking cold tea was a price worth paying for somewhere warm to sit. Sometimes there'd be a group of us, and we learnt too that good conversation makes time fly.

I'm still amused by the fact that Mick Jagger reputedly went berserk if any of his children left an empty room with the light still switched on :)
Maria Zannini said…
Mike: I'm sure old Mick was born during the war, hence his lights out rule.

It took me a while to let go a little and enjoy a few luxuries. As I get older, it gets easier.