top of page
Search
  • brad06154

One thing at a Time

Do you feel like you are constantly trying to juggle multiple priorities?  Do you feel like you could accomplish most things if you only had the time to sit down and focus on one thing at a time?

Most people suffer from this challenge when managing money. 


Trying to pay the bills, payoff some debt, save for retirement and save for something else all at the same time is not the best way to make progress. 


It is human nature to be motivated by seeing progress.  When we feel like we are making a difference, we will work harder.  The opposite is also true.  When we feel like we have been working hard and have little to show for it, we will become less motivated.


So my suggestion is to focus on a single financial goal at a time – at least until you get the most foundational one’s taken care of.  If you focus on one thing at a time, you will see progress and be more motivated to work harder to achieve the next step.  Putting money into multiple goals at a time, it is easy to feel like little progress is being made.


 Keeping a budget so you can control your spending – and potentially make some sacrificial spending reductions is key.  Here are the first few milestones for your consideration:


1.        Starter Emergency Fund:  Put 1k to 2k away in a savings account as fast as you can.  Sell something, get some extra hours, work a side gig.  Do whatever it takes but put an initial emergency fund away in a month.


2.       Pay off your debts, one at a time.   You have a small emergency fund so that you do not have to pull out the credit card every time you get a flat tire.  Start with the smallest debt balance you have – and throw every extra penny you can scrape together at it.  Stop eating out, cut out all unnecessary spending, and pay off that smallest balance as fast as possible.  Once done, that debt payment is extra every month to work on the next debt.  Repeat this process up smallest balance to largest up through the last debt (other than your mortgage).  You will be amazed at the changes in spending you are willing to make after you get to cross a couple debts off the list.


3.       Build up a real Emergency fund:  Now that you don’t have anymore debt payments, you should have a lot of extra money each month.  Put all of it into your Emergency fund savings account.  Keep going until you have between three and six months of living expenses in savings.  This is what you will use when you are out of work, ill, or have a significant expense (like a hospital bill).


4.       Save for Retirement:  Without all those debt payments and with an Emergency Fund in place – it should be easy to put away 15% of everything you make toward retirement.  Your employer’s 401k plan is a good place for this.  If they don’t have one, consider setting up your own IRA.


Keeping your spending under control and focus on one goal at a time, you are likely to be shocked by how much progress you can make.  Once you have the first 3 steps above complete, and you are saving every month for retirement – you can fund other priorities.  Kid’s college, a new house, travel……..  all these things will come easier with these foundational items behind you.

5 views

Recent Posts

See All

Comentarios


bottom of page