Every new year brings a fresh start. You might find yourself saying, “I’m going to do things differently this time around.” It’s a time for big ideas and the best intentions.
So what can we do differently this year to follow through for success?
I find it helpful to write things down. Something special happens when I write down specific goals: I actually follow through with them! When it comes to finances, research has shown that writing down goals helps produce results. Americans who have a written financial plan are far more likely to have an emergency fund, save for retirement and feel financially stable.
As a seminary student on Vicarage, some of your financial goals might seem out of reach (such as retirement savings), but what goals are within your reach? What shorter term goals - with a little time and effort - are attainable? My challenge to you during the remainder of your Vicarage year is to write down at least two short-term financial goals and make the effort to complete them.
Consider these goals:
- Make a budget and live by it. If you just cringed after reading the “B” word, you’re not alone. Most people will! Why is that? Because most people look at a budget as the “law” of financial planning. If the budget was the law, it would tell us exactly how we must spend our money. I personally view a budget more in the spirit of the gospel, as a freeing document. We still have a responsibility to set limits and parameters for our spending, but if we find that our spending is out of line, we have the grace to make adjustments when necessary.
- Save for an emergency fund. An emergency fund is simply money you’ve set aside for life’s unexpected events. Start with a goal of saving $500 or $1,000. An ideal longer-term goal would be to have three to six months of living expenses saved.
- Paying off credit card debt. It’s always a good idea to pay off what you owe ASAP to save on interest and free up cash for other things. Once paid off, be conscious about not using credit cards as much. Credit cards can enable you to make poor decisions with money.
- Save for expenses during your fourth year at the Seminary. The more you save now the less you’ll need to borrow or possibly work to afford next year. Start your fourth year on positive financial footing.
Once you’ve made your goals, you need to work to achieve them. Here are some pointers to help:
- Automate your efforts. You’re more likely to succeed at your financial goals if you set up automatic transfers. That way on payday, the appropriate amount of money for each objective will be set aside. For example, you may decide to set up an automatic transfer toward your emergency fund. That way the money is safely tucked away before you spend it.
- Remind yourself of your objective and track your progress. When you’ve set goals, you have something you’re working toward. So remind yourself that the sacrifice is worth it! At least once a month check to make sure you’re on track to make your goal. If you are trying to save $100 a month and after two months you’ve saved nothing, you clearly need to make some adjustments. You can track your progress on a spreadsheet or an app such as Mint or Everydollar. You can also use visual aids. Who doesn’t love a good paper chain with each link representing a specific dollar amount.
- Be accountable to someone. Research has shown that when you share your goals with someone and discuss your progress, you’re more likely to stay motivated. Enlist your spouse or a friend to be your accountability partner and report your progress to him or her once a week or month.
Goals give us something to work toward and help us stay motivated. I know saving money and planning for a secure financial future is hard and may require sacrifices at times. Unless you have a clear reason “Why,” you’re far less likely to do the hard work necessary to achieve them. Hopefully, you’re ready to get started with setting some financial goals for the rest of the year. If you start today, you’re more likely to end the year in a better financial position.