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For many of us, our big dreams might seem totally out of reach. We look at our life right now and we think there’s just no way we’ll ever be able to get to that place. But I’m here to tell you, that’s simply not true! The reason you’re not reaching your goals isn’t that it’s not possible, it’s because you’re not choosing the right priorities! There are three big financial priorities that you need to commit to if you want to achieve your big dreams.
Decide on your priorities
The first step to moving towards your big dreams is to decide which priorities you need to focus on to get you there. The three biggest financial priorities for almost everyone are the same:
- Pay off debt
- Build up your savings
- Give more to others
Chances are, at least one of those goals resonates with you. If you want to pay off debt, sit down and make a plan for how you will do that. Many people use the debt snowball method which has you pay off your smallest debt first and rollover the payment into your next largest debt until you’ve paid them all off. This gives you that little bit of a quick win to keep you motivated. But there are plenty of ways you can choose from depending on what makes the most sense for you.
If your goal is to build up your savings, then decide on what you need to save for, how much you want to save, and where you’ll keep those savings. You’ll want it to be separate from your regular monthly budget money, but still readily available for when you do need it. I recommend starting with at least $1,000 in the bank that can be used to cover true emergencies (not the oops-I-forgot-to-plan-dinner-let’s-order-takeout kind of emergency, but the type that really truly is an urgent need that can’t be met by what you already have budgeted).
And if you’re already debt-free and you have a nice savings built up, then, first of all, go you!! Now you get to really enjoy yourself and give freely to those who may need it more than you! Choose a charity or maybe even budget a set amount each month that you will use to help a friend in need whenever they need it. Whatever kind of giving brings you joy, do that.
The biggest obstacle to meeting your financial goals is not staying laser-focused on your top priorities. You may have 10 plates spinning all at once, but that’s not going to get you anywhere. If everything is important, then nothing is. Don’t spread yourself too thin. I like to call this type of focus dealing with my front-burner issue. What’s the #1 pain point in your financial life? What’s the one thing that causes the most stress, limits your ability to live the life you want, and keeps you up at night? That’s your front-burner issue.
Maybe you don’t have any savings at all and you know you need to. But if you’re drowning in debt and can barely cover your monthly payments, it’s going to be a long and hard road to build up your savings. You need to give yourself a little margin in your budget first so that when you do turn your focus to savings, you’ll have a better cash flow to work with.
Now, I’m not saying that you should never fund your savings if you’re working on paying off debt, or that you shouldn’t pay your debt payments while you build your savings. You just need to make sure you keep your first priority first. If your goal is to become debt-free, then fund those categories first before adding extra to your savings categories.
The final step towards financial freedom is to completely eliminate distractions from your life (or as much as is possible). If going to Target is going to completely derail you from your debt payoff goal, then stay away from Target!!! If you know that going into a thrift shop all but guarantees that you’ll walk out having totally blown your budget for the month, then have a no-spend rule in your house. Whatever it is that triggers you to blow your budget, and therefore not meet your goals, needs to be limited or completely eliminated.
If brick and mortar stores tend to cause you to spend more, shop online. If online shopping is a weakness, then stay off the internet. Maybe it means always taking someone with you when you shop and creating a list that they will make sure you stick to. Perhaps you even need to give your credit or debit card to someone you can trust who can keep you accountable. Whatever it takes, don’t let temporary instant gratification pull you away from what you’ve already decided are your top priorities.
Achieving your life dreams is totally doable if you have the right tools and can set your financial priorities straight! By focusing on just one thing at a time and eliminating all distractions you will begin to gain forward momentum and start reaching your goals. Then, before you know it, you’ll be living the life of your dreams!
To make choosing and sticking to your priorities even easier, try out this amazing tool! YNAB helps you track your spending, budget your money, and reach your goals faster, all in one simple to use software. Give it a try today and get 2 free months using my link. You’ve got nothing to lose!