Leveling up your finances can be daunting, especially if you’ve made decisions in the past that have negatively affected your ability to pay bills and save money. But that doesn’t mean making positive financial change is impossible. Instead, it’ll just take time and healing to get you to a place where you’re confident in your decision-making surrounding finances.
I’ve personally learned a lot in my journey towards financial excellence, and one of the best pieces of advice I have to offer is to set yourself up for success. Take on small goals that you know are achievable, to boost your financial confidence. From there, you can build to harder goals until one day you look up and realize that you’re doing well.
Goals are the building block to financial success. And creating actionable ones that are appropriate for where you are in life will help you overcome many financial hurdles.
Here are my favorite goals to work towards.
Journal Your Financial Feelings
Money is emotional. There are no two ways around it. When you’re doing well with your money, it’s easy to feel good about yourself. But when you’re struggling with money, it’s easy to beat yourself up about it.
Journaling is a great way to see how you feel about yourself financially. It’s a great first step to dealing with your money. Sometimes it’s helpful to see how you feel about things because you can refute your thoughts. Saying that you are terrible with money is easier to do when it’s just subliminal messing in your head. But when it’s out on paper it can feel less true, and that helps you start to think through the mental blocks in your head.
Refuting these mental blocks is huge to financial growth. Mindset is the absolute most important part of financial literacy. And a good mindset will go a long way in helping create positive financial change.
If you notice that you’re resistant to changing your internal monologue about money, reach out to a financial therapist or money coach to help gain an outside perspective on why you might be feeling the way that you’re feeling.
Create Small Milestones of Financial Success
Creating those little milestones to build momentum with your financial goals is crucial when adjusting your financial mindset and becoming more confident with your money. Using small, achievable goals will create a feedback loop that drives you to further success. If you achieve one goal, you’ll feel better about yourself and you’ll set another goal. When that one is achieved, you will feel the success of two goals under your belt.
The crucial part of using small milestones to build financial success is that you have to make realistic goals. For example, I make $45,000 a year. It’s unrealistic for me to set a goal that says, “I need to save $20,000 this year.” Such an audacious goal sets me up for success. But let’s say, I set a goal of saving $1,200 in a year. This is a much more doable goal because it’s only $100 a month. And a way the smaller percentage of my gross salary than $20,000.
I can even challenge myself to beat my goal by the end of the year. Gamefying your savings goals helps accomplish them faster. If I’m able to save an extra $20 a month, I can complete this goal even faster. And this becomes fun, because the more I put away, the quicker I’m able to reach my goal.
You can start with smaller goals – and then work toward larger goals. I always recommend starting with a goal of $20 a paycheck. $20 is equivalent to a nice dinner out or a few trips to Starbucks. For most people, it’s a small adjustment to their lifestyle that leads to permanent positive change. If you feel like $20 is too small of a number, you can bump it up to $50, or if it’s too small, you can bump it down to $10.
Another good tip with this is to automate your savings. Set up a direct deposit and don’t touch it.
The point is that you start with a small, achievable exercise to build your muscle and go from there. Good Long-term goals might be saving up for a down payment on a house, stocking an emergency fund, investing regularly into your 401(k), or going on a really cool vacation with the money you’ve saved. Whatever your long-term goal is, it’s important that you start with smaller goals to set yourself up for financial success.
Use Side Hustles to Upgrade Your Finances
If you just don’t have room in your budget to save, that’s okay. Some of us are living life very close to the poverty line, and it can be frustrating to find extra dollars to stack away for later use when bills are imminent. That’s where finding a side hustle can come in handy.
Side hustles are jobs that you work outside of your main job. Some people prefer picking up a second job on the weekends, or outside of hours, and others prefer finding contract jobs. Regardless, they’re jobs you work on outside of your regular work, and each can help make financial milestones easier to reach.
A good rule of thumb with side hustles is to make at least as much as you would with an hourly job, or even better to double it. The goal is to be working to fund your financial goals, so you don’t want to be making less than your full-time role. If you are, then you might need to consider choosing a different side hustle or finding better clients.
The best thing about side hustles is that they’re as versatile as you want them to be. I’ve made money for pet sitting before, training horses, delivering groceries, and writing articles. Consider what skillsets you have and expand on them to find out if they’re profitable.
Another popular way to side hustle is to create and sell a product. This is slightly different than contract or hourly work because you’re not being paid for time spent, just product delivered. To ensure you’re being fair, set an hourly rate for yourself. If it takes 2 hours to paint a still life that I sell, then I should price the bar of soap accordingly. $15 for each hour, and $10 for materials. The still life should cost $40. Ensure that you’re using a market rate value for your skills by looking around to see who else is selling similar items.
Choose a Large Goal and See It Through to Completion
Everything on this list so far has been about setting yourself up for small financial wins. The best thing about small financial wins is that they will inevitably lead to larger financial wins. But it can be overwhelming to think of all the financial wins you want to accomplish.
For example, I have some credit card debt, student loans, my car note, and medical debt, and I want to save for a new house. Those are all big goals. And taken together, it’s a little bit impossible to focus on any of them enough to accomplish them. Instead, I prioritize. Credit card debt is the most important to me, so I see how I can pay that down first. Everything else, I just make the minimums on. And the house, I don’t worry about yet.
Looking at what you have in front of you and picking a goal to focus on is empowering because it allows you to see the big picture of your finances and choose which adventure you’re going to go on next. That’s how I like to think of it anyway.
The journey towards a huge goal can feel overwhelming. When you’re looking at a $3,000 credit card bill, you might not know where to start. But that’s okay. Remember that journaling exercise we did at the beginning of this project? If you need to, repeat it with the goal that you have in mind. Write down all your hang-ups and see if you can come up with solutions. Creative problem solving is the key to accomplishing large goals.
Surround Yourself With Like-Minded Friends
Sometimes our journey toward financial stability is lonely. Not everyone in our life is going to be pursuing things like debt freedom and homeownership. But these types of journeys are best done in the company of other like-minded individuals.
Some of my best friends I’ve met because I started on a journey of financial stability and they saw and applauded my success. It can be a little unnerving, to be open and honest about finances with someone, but I can assure you that having friends who support you helps when you’re trying to dig out of debt or save for that first house.
It’s important that you realize, when embarking on a shared journey like this, that not everyone will have the same goals as you and that’s fine. Some people might feel uncomfortable with the fact that you’re dreaming of homeownership because it makes them look at their life. It’s not uncommon to lose friends during a huge lifestyle change, because they don’t want to reflect on their own lives and make changes. That’s okay. Eventually, you will find your people.
Check In With Yourself Regularly to Accomplish Your Goals
Your large goals, the ones that you really care about, won’t happen overnight. It can be easy to lose the forest for the trees. Instead of focusing on the minute details, keep the bigger picture in mind.
I love graphics. They make it easy to track progress and keep me motivated. Finding small ways to keep yourself excited about your goal will keep you going. But there will be times when achieving your financial dreams feels overwhelming and exhausting. That’s okay. It’s not an easy journey.
Sit with your feelings and write them down. Money is very emotional, and it’s okay that it takes time to sort out and process what you’re doing. Maybe you’re foregoing nights out with your friends because you want to pay off your credit card debt. Or maybe you’re working a second job to help save for your kid’s college education. In moments where you feel like what you’re doing isn’t worth it, it’s good to be reminded that your life will be better when you’ve accomplished your goal.
I like to think of financial success as running a lifelong marathon. You’ll feel great when the thing is over, but during the middle, when your arms and legs are tired, you might not think you want to continue. Look into yourself and find the will to do so, like all of the other marathon runners around you.
Build Multiple Wealth Streams
A great way to help supercharge your finances is to create multiple income streams. Income streams are different ways to get paid. They’re similar to side hustles, except that many income streams can be built on the idea of passive income. Passive income is developed when you create a way to earn money without doing continual work.
One of the most popular examples of passive income is investing in real estate. There are plenty of different ways to invest in real estate, starting with REITs and working your way up to owning multiple properties. While property management doesn’t sound passive at first, there are ways that you can decrease the amount of work you do and still collect a profit. You can hire out all of the work of property management and collect checks from your renters.
Another great passive income stream is to invest in stocks with dividends. Dividends are payments that companies make to their investors. When a company earns a certain amount of money, they pay a percentage of it back to its stockholders. It’s a way to earn money by investing on top of the markets. Dividends are paid out generally quarterly. You can invest in single companies or collections of companies in the stock market, depending on your financial risk tolerance.
But those aren’t the only two ways to make passive income. You can also write books, create blogs, and develop courses. Etsy shops are also a profitable income stream. Think through what you enjoy doing and see if there’s a way to monetize it. That way you’ll be more financially solvent.
Give Back to Your Community
One of the most financially empowering things that you can do in my opinion is to give back to your community—but only once you’re in a place of financial power. I love when I’m able to buy people’s groceries or donate to a cause that’s close to my heart.
I do want to acknowledge that you should only do this if your financial security net is firmly in place. Do not feel the need to give while you’re in a place of financial disempowerment.
Giving back to the community helps center you into your community. Community is empowering for people, especially disenfranchised people. And when you’re coming from a place of financial instability into a place of financial empowerment, giving to the community can ground you into a sense of self.
And it doesn’t even have to be monthly donations to a specific organization. I actually prefer a direct aid model of giving to one that is given to nonprofits, but that’s just a matter of opinion. If you have a cause that’s especially important to you, giving money is a great way to find a sense of purpose.
You can look back on where you’ve been and reflect on where you are currently. Wow, I used to struggle to make ends meet and now I can participate in a cause that’s close to my heart. It’s an amazing feeling that isn’t reflected in many other places.
Giving also reminds us that money is a tool. When we move from a place of financial instability to a place of financial empowerment, it can be easy to get hung up on saving money for saving money’s sake. But money is a tool to live a fulfilled life. Developing a practice of giving enables you to live a fulfilled life.
Overall, creating practices of financial success is going to take time. Don’t feel overwhelmed at the beginning of the process. These steps are designed to help you level your finances up, but they’re meant to be implemented over a span of time.
Don’t progress to the next step until you feel ready. Everyone’s financial journey is different and some steps might take longer for you to complete than other steps. I want to stress that progress is progress, no matter how small.
Your job as someone committed to bettering themselves financially is to take small steps one at a time. I like to think of managing your money as a marathon. You’re not going to make it to the finish line by sprinting as fast as possible all at once. Instead, marathoners focus on pacing themselves, refueling when necessary, and encouraging themselves at small milestones along the way. This is the way you should approach your finances as well.