This blog is a continuation of Part 1, the first 5 steps to Managing Your Finances Like a Boss Babe. If you missed it, make sure to read it here first.
“Setting goals is the first step in turning the invisible into the visible.” – Tony Robbins
Goals give a vision and direction in your life. If you want to accomplish something, figure out what you want and write it down. I won’t go into too much detail on why goal setting is important, because I might have to write a whole blog on it. In order to achieve anything in life, you need a goal and this is applicable to your finances.
What do you want? Where do you want to go? Consider the following questions:
- When do I want to have my debt (loan/car/mortgage/credit card) paid off?
- How much do I want to be earning in the next 1, 5, 10 years?
- How much money do I need to save for that vacation/car/house?
- When do I want to retire?
- What can of lifestyle do I want to live?
Big goals are great, but they can also be overwhelming. Once you have these written out, break them down into 90-day goals. Short term goals are proven to be more effective and allow you to celebrate when you accomplish them. For easy math, if you want to save $12,000 in the next year, your 90-day goal would be to save $3,000. This means you’ll need to save $1,000 every month so make sure you set up your automated savings to $500/pay cheque. If you accomplish your goal, celebrate! Treat yourself to a nice dinner, hotel night in the city, or that pair of shoes you’ve been eyeing down.
What can you do today to ensure you get to where you want to go.
Pay Off Your Credit Card!
Plain and simple. Don’t use your credit card unless you can pay off your purchase in the next month (or two). Credit cards make it easy for us to think that we can have things we really can’t afford. When used effectively they can be a tool for success but they can also really screw you over. When I had my first credit card in high school it was constantly maxed out at $500. Let me tell you, interest fees got me HARD which made it almost impossible to pay off. You get sucked into a cycle of paying off the lowest monthly payment, and interest fees on credit cards are so high they can overpower your monthly payments. This is why so many people get stuck with credit card debt.
Use this rule as a guiding principle to ensure you don’t get caught in a vicious cycle of making the bank more money instead of yourself. As I said, credit cards can be a tool when you know how to manage debt properly. If you constantly have CC debt pay that off first, then learn how to manage it. Leave your credit card at home for the week, use cash, find an accountability partner. If you have to sacrafice a few things for a month to get it paid off, stop complaining and just DO IT.
Do You REALLY Need It?
A tough, but important question to ask yourself is, “DO YOU REALLY NEED IT?”. Most of the time the answer is no. This has helped me avoid on the whim purchases that could have been unnecessary. Until you’re in a place of financial abundance and security it’s important to consider what you purchase, whether you’ll use it a numerous amount of times, and whether it’ll actually bring you value and joy out of life.
As I said, I believe in balance but at the end of the day being financially smart and keeping yourself out of debt is extremely important. If there’s something you really want, consider whether you’ve set aside all of your savings, paid off your bills, and take some time to think about it to avoid being an impulse buyer, and if you’ve put thought into it, have the money, and are being responsible then sure, go for it! I love treating myself because I work hard but I’ve learned to do it while being smart.
This has recently been very applicable to me when it comes to purchasing a home or a car. Society has many of us thinking we need to get a mortgage and a home or that we need a new car. Buying a home is a great idea if you can really afford it and know what you’re getting yourself into. The fact Brandon and I can afford a home doesn’t mean we’re going to buy one. We’ve had the conversation and realized, that we don’t REALLY need it. A mortgage can be a huge financial strain. Not only that, you need to consider property taxes, purchasing furniture, appliances, etc. Do you have money set aside if something goes wrong? We also really like to travel and don’t want to be house poor. The same thing with buying a car, I could buy a new car now but do I really need it? No. Would I like one? Yes.
Chris Harder shared a really great rule on one of his podcast – if you’re planning on making a big purchase wait a year. By that time you have not only saved more money, but you’ll know whether you really still want/need it.
Make More Money
Simple as that! If you feel yourself struggling or believe that you want more out of life aka buy nice things, or even travel then find a way to make more money. Since being a teenager, I’ve worked 2 jobs and despite it being hard, it makes a huge difference. My goal in life is to create financial freedom for myself and my family, this underlying motivation gets me through the hard work.
Having a side hustle now is easier than ever. If there’s something you really love to do, find a way to monetize it. You can use this extra money to travel or buy that thing you’ve been eyeing down. Or you know, just pay down that debt. If you follow me, you’re probably in your low, mid, to high twenties with no kids, building your career. Now is the time to put in the effort and work before you start to build a family. Most of my evenings and weekends are dedicated to working. So, if you find yourself struggling to go find another source of income.
Mindset, Mindset, Mindset
At the end of the day, being financially responsible and managing your finances like that boss babe you are, really comes down to your mindset. Your money stories and beliefs can really hold you back from living a life of financial abundance. I grew up with tapes in my head that there was never enough, money made life hard, and that it was hard to get. These have a significant impact on how you manage your money and how easily money flows to you.
Sit down with a piece of paper and ask yourself what limiting beliefs or stories you have about money. Next, a great exercise used by Peta Kelly and Jen Sincero, is to write a letter to money. Write down everything you feel about money ( positive or negative) to try and work through your relationship with it. Look at the negative stories and figure out how to make them positive.
Here are a few resources that have helped me:
- Book: You are a Bad Ass at Making Money
- Podcast: For the Love of Money – Chris Harder
- Book: Beautiful Money
- Podcast: Melissa Ambrosini with Peta Kelly
- Blog: WealthSimple Magazine
If you’ve made it to the end of this blog, congrats! You’re ready and committed to managing your finances like a boss babe. If you weren’t, you probably wouldn’t have made it past the first few steps. My challenge to you is to pick just 1 or 2 of these steps that you might not already be doing and create a goal to accomplish over the next 3 months. Then pick 1-2 more and focus on implementing those. Most of these steps aren’t always quick and easy, but over time I promise you, you’ll see the difference.
Message me if you have any questions and I’d love to hear how you’re implementing these steps!