Creating Your Best Money Year Ever – Parts Two & Three
Last week we reviewed the 3-step path to greater financial success: Your “M” Vision, “M” Goals, and then “M” Habits (“M” short for “Money”). You were instructed to complete the first step – defining your “M” Vision.
With your “M” Vision written down, including all of the things that must have happened by the end of 2015 for you to be happy with your financial progress, you now have a defined vision of what a successful year must look like.
Step 2: To begin setting Your “M” Goals, list your top three to five goals to accomplish in 2015.
While your vision may have included many things, it is now time to begin narrowing your focus down to fewer items so that you can better accomplish them. Examples might include:
- Start a college savings plan for my kids
- Pay off a car loan
- Establish a budget spending plan (none of us like the word “budget”!)
- Teach my kids about money
- Save up to buy a house
Now choose the ONE goal that if accomplished, would have the greatest impact on your personal finances in 2015. Typically when you look at your list, one stands out that will help accomplish many of the other goals. For example, from the list above you might determine that paying off your car loan will allow you to better save for your children’s college or save up to buy a house. Also, establishing a monthly spending plan might just be a necessary step to seeing how much extra you can put toward paying off that car loan faster. In addition, you can be teaching your kids about money along the way.
Step 3: Establish the two “M” Habits, or actions, necessary for you to accomplish this goal.
This is where the rubber meets the road. What two habits, or actions, will you implement consistently to achieve this goal? These must be very specific, and ideally you can put these habits into your calendar. Depending on your specific goal you’ve chosen to tackle first, here are some examples:
- Spend no more than $100 per week on groceries
- Save 10% of my take-home pay each pay period into a separate savings account
- Contribute 5% of my grow income to my 401k at work
- Pay an additional $200 per month toward my car loan
- Review and discuss our family spending plan for 30 minutes each month
Using the example of paying off a car loan, the two key habits necessary to pay off your Visa might be:
- Pay an extra $200 per month toward balance
- Reduce weekly spending on dining out to $200 (instead of $400)
Action Plan: Set aside 30-60 minutes this week to list your top goals for 2015, select the most important one, and then establish the two critical habits to accomplish this top goal.
Along the way, remember to revisit your “M” Vision. Be sure your money activities and goals throughout the year tie into what you have defined as a successful financial future for you and your family.
Please share your goals and habits in the comments below. We love to hear what you are working on!