Will this be the year you get into the best financial shape of your life? The year of your financial turnaround!
This past year has flown by. I remember checking in with you about your financial progress in the first quarter of the year. Seems like yesterday, right?!
These first weeks of the year are the best time to make a plan, set goals and create a vision for what you want to achieve financially in this new year…and make it the year of your financial turnaround, or even better, the year of your financial awakening!
Feeling excited? I am! Let’s make it your best year yet!
Get real about your current money situation
What is the state of your financial situation right now? This is about your personal finances right now, not of your business, not your aspirations, the real state of play of your current finances.
Maybe it’s shaping up pretty well, you’ve got cash saved and no high-interest debts; this year is about supercharging your money progress.
Or maybe fronting up to your situation means getting real about some financial cleaning up to be done. Do you need to pay off debt and get spending habits in check?
If you fall into the second category, this exercise can be a bit ‘ouch!’. Unless you know where you stand currently with savings, assets, debt and spending habits you won’t be able to set achievable goals for the year ahead. Remember, what gets measured, gets managed!
Make your goals then prioritize them for action in each quarter
The first part might have been painful but now we’re getting to the fun stuff; setting money goals!
Write down your top 3 financial goals for this year and why you want to achieve them.
Then prioritize your list.
For example; you may say ‘I will begin investing!’ as a goal, but do you need to get other aspects of your financial life in order first?
If you’ve got a couple of grand of credit card debt, it would be wise to pay the high-interest debt off before investing.
That means your goals might look something like this –
Goal #1 – Pay off credit card debt
Goal #2 – Once credit card debt is paid off, make my first investment
and then, Goal #3 – Invest $10,000 in investment-grade stocks.
Then break those goals into the four quarters of the year.
For example –
In the 1st quarter you’d focus on Goal #1 – paying off debt.
In the 2nd quarter you’d focus on Goal #2 – making your first stock investment.
In the 3rd and 4th quarters focus on Goal #3 – investing enough each month to reach your goal of $10,000.
When you reduce the number of active goals you’re working on at the same time, you’ll allow your mind (and funds!) to be hyper-focused and you won’t feel overwhelmed.
Progress feels slower when you tackle too many goals at once and it’s easy to get discouraged. In fact, it’s the single most contributing reason why people fail. And for those interested, this is a money mindset hack.
Quit the excuses and make this the year you begin investing
This is a serious call to action my friend.
If you’re not one of my students or readers already investing, what’s holding you back?
Investing isn’t something for the ‘financial elite’.
For anyone who wants to live a truly financially free life, retire comfortably or fund their biggest life goals, investing is a non-negotiable part of the wealth creation equation.
In fact, it’s THE BIGGEST part of the equation.
Relying on your superannuation or savings just isn’t going to cut it.
Every day, week, month, or year you wait to get started is a day, week, month, and year you’re losing money. Thousands and thousands of dollars.
So, if not now, when?
“I need a decent sum of money before I can start investing, and I just don’t have that at the moment”
Here’s the truth. You don’t need a big lump sum of cash to get started investing.
Here’s another truth. Unless you make it a priority to save, and find that money to invest, there never will be a ‘moment’ where it magically appears.
If you spend $50 a week on takeaway meals, you’ve got money to invest. It all comes down to your choices. Make managing and investing money a priority, and you’ll be rewarded for it.
The other common reason people shy away from investing? Information overload.
“I’ve got some money saved up but invest it? I’ve got no idea where to begin!”
Start small. Start with whatever you have to invest and dip your toe in the water.
Make that the goal for the first few months of this year – just to get started.
I’d recommend making a very simple investment in an Exchange Traded Fund or Index Fund as they are sometimes called.
The barrier to entry is low, usually $500 – $1000. Good news for those who only have a small amount to start and also for those who do have a sizable sum of cash squirreled away – you don’t have to go ‘all in’ with everything.
The benefit of starting small is that the lessons are cheap, doesn’t matter if you make a mistake as the stakes are not all that high. This perfectly prepares you for when the amount you are investing grows and the stakes are higher.
The Basics of a Financial Turnaround This Year
If you’re new to The Investors Way, here are a few of my previous posts to help get your head around the basics:
The Importance Of Diversification
10 Quick Rules Of Investing Everyone Should Know
Beginner Investor – 5 Things To Avoid
My other piece of advice for you is to learn as you go.
As your knowledge (and hopefully interest!) in investing grows, ramp up with bigger or more diversified contributions.
You don’t need to know it all to get started and thinking that you do will just overwhelm you – avoid letting that happen!
Overwhelm is the enemy of achieving your goals; whether it’s making your first investment or starting a new fitness plan.
You get overwhelmed, action stalls, and then complacency creeps in.
Then, yet another year later, that goal you wrote out on a piece of paper…
“I will start investing this year!”
….is still just a goal written on a piece of paper and you’re still stuck in the same old unhappy, frustrating money situation.
Seek out the right resources, information, mentors, and programs to help you progress your journey.
Make a plan for your money (then automate the heck out of it)
If you’re going to have a financial around this year, you’re going to need a budget right?
Well actually, no.
I think a budget can be a disaster for your personal finances. Budgets rely on sheer willpower not to spend this or to save that.
Willpower doesn’t last. Automation does.
If you want to kick serious financial goals this year, forget the budget and make yourself a money plan. Then automate the heck out of it.
Read about how to make your money plan here and how to automate it here.
Conclusion
Will this be the year you get into the best financial shape of your life? I’d love to hear from you in the comments. Share your top 2 or 3 financial goals for the year and how you’re planning to get there!
The good news for those of you that have read this far, and are serious about making this the year of your financial turnaround, or your financial awakening, is that I’ve got a special training for you, that doesn’t cost a cent.
To access the 3 Wealth Steps special training, click here.