Budget Buster: How to nail your 2017 money goals
Our planet has completed another lap around the nuclear fireball at the centre of the solar system. Traditionally we mark this occasion by a) getting really drunk, and b) committing to improve our lives during the next rotation.
Everyone manages to nail the getting really drunk part, but not so much the self-improvement thing.
The problem is that the goals we set are terrible. We dream them up on the spur of the moment, so it's no surprise they quickly fall by the wayside. If you want to join the small minority of people who actually succeed, block off a couple of solid hours for the following exercise.
First, choose something really specific. 'I will save more money' is a useless goal. So is 'I will spend less money on clothes'. The intention is good, but they're too wishy-washy. Try 'I will save $100 out of every pay', or 'I will limit my clothing spending to $1000 this year'.
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It's important to be bold, but realistic. You need to work toward something that gets you fired up, but not so far out of reach that you'll fail miserably and lose motivation.
The next thing required is a specific timeframe. Let's say you decide to save $5000 by the end of the year. You can then break down the goal into shorter targets, like stashing $100 every week. If you've committed to spending less than $1000 on clothes, you would calculate a monthly budget of $83.
Once you've got a specific goal with a specific timeframe, write it down. This is super important, because things become real when you put them on paper. It sounds like some woo-woo mystical nonsense, but it works. If possible, do it every single day. You want to wire your brain to be constantly focusing you in the right direction, even subconsciously.
At the very least, put your goal somewhere you'll see it constantly. Set your phone and computer background to a picture of the house, car, or holiday you're working towards. Change your password to something that jolts your memory every single time you type it in.
The other crucial step is to track your progress. If you're trying to build your net worth (everything you own, minus everything you owe) you can grab a copy of my net worth tracking spreadsheet here, or use a piece of paper stuck to the fridge with magnets. It doesn't matter how you do it - just do it.
Finally, automate everything you can. Willpower is a limited resource, so you want to use as little as possible. An example would be upping your KiwiSaver contribution rate, or setting up an automatic transfer to an untouchable account every payday.
This planet hurtles around the sun at breakneck speed, but one year later, it's right back where it started. Sadly, so are most of its inhabitants. Break free from the path of least resistance, and forge your own path in 2017.
- Sunday News