Hey FreeUp readers! Today is a guest post by Amanda and Julia who run a blog called AJ Money Matters. They are coming at you with some awesome advice about financial planning to reach financial stability!
Financial stability... something everyone wants but yet, a lot of people are still struggling to find it. What if we told you there's an important key you may be missing to unlock the door to achieving financial stability?
You may be scratching your head thinking that you do everything right; you have a budget, you keep track of your spending, you live a minimalist life however, you still aren't quite there. Well, we're telling you right now your budget is literally useless unless you have one secret ingredient.
We've got one simple key ingredient to add to your financial journey. Set Clear Financial Goals. That's it AJ? Really? If you're thinking this totally isn't going to work, well, you're wrong. Shift that mindset, get your positive thinking cap on, and let's delve into the importance of this secret key.
We wouldn't be saying this if it wasn't something we've experienced. We've both been in the realm of unemployment (longer than we might have liked). We kept a strict budget and were always extremely conscious of where our money went, but we immediately stopped setting financial goals due to a lack of income coming in, and that wasn't the smartest idea.
We'll be completely honest, we found it extremely difficult to maintain our financial goals whilst being unemployed because to put it simply, how can you work towards them when you don't have any income? The truth is, it doesn't matter whether or not you're receiving any income, you CAN set clear financial goals. For example, our financial goal was to try to make money any way we could, and then yes, eventually land a stable income again.
The point is, having a financial goal will keep you motivated and in check. As your life changes, your financial goals will change, and yes, they may change only temporarily. But that's the nature of life; it can slap you in the face anytime and put you on a detour to your ultimate financial goal.
We know we're preaching to the choir when we talk about goals, but really... goals are everything. Do you sometimes feel that your money isn't reaching its full potential, and it's just used for those pesky bills? If you answered yes to yourself, then you're exactly the type of person that will benefit from setting clear financial goals.
When you organize and set clear goals your money suddenly finds its purpose aside from those annoying bills necessary to live and breathe. No, we aren't talking crazy outlandish goals, we are literally talking about giving yourself a financial goal that could be as simple as to save $500 for a holiday. When your money has a purpose and you can see that purpose, then you're on your way to unlocking financial stability.
Implement your goals at the beginning of each month when you go to review your budget (because yes, you have a budget by now, right?). That way it's fresh and you know exactly what you want to achieve from that month onward. If you prefer weekly, go weekly.
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As long as you're writing those goals and making them real, that's what counts. This gets you into the habit of also constantly reviewing your desires and what it is you want. We all know that as time goes on, our desires can change dependent upon our relationships, assets we own, our career, what makes us happy etc. So, it's important to factor these lifestyle aspects into our financial goals, and constantly (and honestly) review.
Yup, that's right. We just said budgets are useless. Call us crazy, but they are if you aren't continually giving them the love and attention they deserve. We are the first to openly admit that sometimes budgets don't always go to plan, but guess what... that's why it's so important to revisit. Situations in life change and sometimes they can impact your budget heavily. If you aren't up-to-date with your budget, then it wont properly reflect your financial situation and capabilities.
In order to achieve the secret key to financial stability by setting clear financial goals, you must revisit your budget. Shift your mindset if you need and start looking at your budget as a means of 'needs basis' rather than a 'wants basis'. We all have wants, but without doing the hard work that 'needs' to be done we can't achieve the 'want' for financial stability.
"When you focus on problems, you'll have more problems. When you focus on possibilities, you'll have more opportunities."
This quote says it all. Your mind is a powerful thing and it can make or break your financial goals, so it's important to keep it in check. For example, we have massive student loans (like over 100k - it's terrible). We liken it to climbing Mt. Everest (even though we have no experience in climbing mountains, it's a great analogy). The day you are debt-free is the top of the mountain. Along the way you'll face harsh weather conditions, mindset struggles wondering if you can really do this, but you'll also find base camps, and places to rest. These base camps help your body reboot and prepare itself for the next leg of the journey. These base camps are your milestones in your debt-free journey. Celebrate how far you've come and reflect (keep those repayments going through!)
Your desire to get to the top and succeed is all in your mind. If you're serious about the financial goal you've set, whatever it may be, always keep your eye on the prize and keep climbing.
Well, now that you know you're only missing one main ingredient to unlocking the door to financial stability, get moving! Crack open that budget, dust off the cobwebs and start putting your financial goals as a priority, and map them into your budget.
Dig hard at your goals, and make your money a priority for all things in life instead of just those pesky bills.
Your hard-earned money deserves to be treated, so why not treat yourself to more than just bills?
Amanda & Julia xx
Zack is one of the co-founders of FreeUp and is in charge of setting the strategy for the blog and managing the day-to-day operations. When he isn't plotting new ways to create awesome blog content, he likes to geek out about global affairs, ride motorcycles and can probably be found hiking somewhere during his days off.