We have all read the headlines. “How This Couple Paid Off $50,000 of Debt in One Year,” and et cetera. More often than not, people who reach financial success are simply normal people. They may not have an outrageously high income, but they also likely don’t own the nicest and newest items.
How is it that the most unsuspecting people are often the most successful financially?
I’ll let you know the secret right off the bat.
The key to financial success is commitment.
More often than not, even just the word “commitment” is enough to scare us away. But just like with any goal, commitment is absolutely necessary to succeed financially. It doesn’t matter how much money you make, where you live, or what luxuries you can buy if you aren’t committed.
It’s one thing to want to be financially healthy, but it’s another to commit to improving your finances. Just like any goal – losing weight, improving grades, or other, it takes a true commitment on your behalf. When the times get tough, commitment is what will pull you through.
So ask yourself. Are you truly committed to improving your financial health? If you said yes, are you acting on it or do you find yourself stumbling constantly?
Commitment is true of my own personal finance story. Though I was never “bad” with money, as in I never had credit card debt, a car loan, and was a natural saver, I struggled to confront my student loan debt head on. Though I knew a fair amount about personal finance, I was not committed to my own finances. As a recent college graduate, it was so easy for me to bank on all of the additional years I had to pay off my student loans. I was told many times that student loan debt was “just a way of life,” and I convinced myself it was true.
It wasn’t until I actually sat down and calculated how much money I was paying to my $28,000 of student loan debt that was literally being thrown away to interest that I became serious about my finances. When I pondered it, the idea of dragging my student loan payments on for 10-15 additional years was dreadful. At that point, I became committed to my finances.
I started a personal finance blog, which started making a little money and allowed me to start my own freelance writing business. All of the money I made from my side hustles went to my student loan debt.
And because I was spending so much time side hustling, I realized I didn’t want to waste any of my hard work. My husband and I took a good, deep look at our spending habits and drastically cut back. We moved into a cheaper apartment closer to our jobs and we started budgeting out our months in advance. Likewise, I committed to working harder at my full-time job and was offered a promotion and raise, which allowed me to pay off even more debt. Since becoming serious about my personal finances over a year ago, I have since paid off over $10,000 of student loan debt, and my husband continues to make progress as well.
For me, commitment was the turning point in my financial journey. Before I was committed, I wasn’t avoiding my finances, but I certainly wasn’t prioritizing them. By committing, I am on track to be debt-free 10 years before my student loan provider said I would be. That’s a great feeling.
What if you are committed to your finances, but still not seeing the results you want? Here are a few tips to ensure your commitment is providing tangible actions.
Have a Plan for Every Dollar
Every single dollar you make has the opportunity to become much more than a dollar. If you have debt, every dollar you pay towards debt repayment is saving you significant money in interest. Likewise, as you invest, each dollar has the potential to become notably more as you allow compound interest to take effect. In order to make and save as much money as possible, it’s vital to have a plan for every dollar of income.
When you allow yourself time to stop and truly think about the effects each single dollar has on your long-term financial health, I guarantee you will find you have a change in mindset. You likely will no longer want to purchase things you thought you wanted. Further, when you create a budget, you limit yourself in areas where you might typically struggle. Budgeting only helps you to prioritize your goals.
Find an Accountability Partner
Even the best personal finance gurus falter, and that’s where accountability comes in. Whether it is a friend, spouse, or family member, finding someone to share your financial goals with and hold you accountable is a must.
No two months are the same, and this will be reflected in your finances. Sometimes, no matter how much we budget or plan, we find that we simply have high expense months. Instead of dwelling on the fact that your budget didn’t go exactly according to plan, simply adapt your budget for the next month.
Remember Perfection is a Lie
No matter how committed we are, it’s expected that at some point, we will all mess up. Keep in mind that being committed doesn’t mean you won’t ever make a mistake. But commitment is being dedicated to picking yourself back up again and trying harder after learning from your mistakes.
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At what point did you become committed to your finances? If you aren’t yet committed, what’s holding you back??