Tag: financial goals

Hope is Not a Plan

As a Christian, my hope is in the Lord, who holds my life in His hands. As a writer, I hope people buy my books and read my blogs. As the owner of short-term rental property, I hope that vacationers decide to stay at my home. But, as a small business consultant, I share with my clients the mantra, “Hope is not a plan.”

Hope is essential to taking risks and moving forward with new opportunities in your life. However, hope does not bring me readers or renters. I must take action to inform potential readers of my books and blogs and potential renters of my property. Those actions involve effort, such as marketing, advertising, and asking for reviews.

If you are trying to achieve a financial goal, hope will not help you to accomplish your goal. You need to have a plan:

  • If you want to purchase a new home or car, you need a plan to accumulate the down payment.
  • If you want to get out of debt, you need a plan to start paying off one debt while meeting the minimum obligations on your other debts.
  • If you would like to retire early, you need to start putting money into a retirement account at an early age and be consistent in making contributions.
  • If you want to improve your credit score, you need to obtain your credit report and assess what debts need to be paid off, what errors need to be corrected, and what steps you can take to reduce your total amount of debt.
  • If you want to start your own business, you must maintain a high credit score and set aside money to invest in your business.
  • If you want to start budgeting, you need to research and evaluate budgeting tools to determine which one you will actually use.

Key Factors of a Plan to Accomplish a Financial Goal:

  1. Live below your means. If you want to save money for any reason, or if you’re going to pay down debt, you must spend less than you make. This requires you to know what you spend and evaluate where to make cuts.
  2. Write down your goals. Studies show that writing down your goals significantly increases your chances of achieving them.
  3. Have an accountability partner. If you are married, you and your spouse should hold each other mutually accountable. If you are unmarried, ask a friend to be your accountability partner. Hold each other accountable by encouraging each other and reminding yourselves that money spent cannot be used to meet your goal.
  4. Celebrate milestones. Give yourself a pat on the back when you hit an intermediate milestone, such as paying off a debt or saving a certain amount of money. Milestone celebrations should be free or low-cost to keep you on track to achieve your goal.
  5. Make it easy to save. Set up payroll deductions for retirement or other savings so you never have access to the money. Download a budgeting tool that makes it easy for you to track your spending. Avoid “window shopping,” which increases your desire for items you do not really need.
  6. Keep your goal in front of you. Have a picture of your dream home or car on your refrigerator. Write your business plan and look around for possible locations. Develop a bucket list of all the fun things you will do in retirement.
  7. Evaluate your progress periodically, and if you have gotten off track, take action to correct your mistakes and get back on the right track.

Your plan does not have to be complicated to be effective. Start dreaming, set a goal, and develop a plan to reach that goal.

Setting and achieving financial goals helps you honor God in how you use and manage the financial resources He has entrusted to you. It also allows you to build treasure in Heaven. For more tips to help you manage your financial resources, please see my other blogs in the Finance tab. My book, Honoring God with Your Money, is full of guidelines to help you use money in a way that builds true wealth.

If you have never accepted Christ as your Savior, please consider accepting the free gift of salvation from your sins and eternal life in Heaven. It will pay dividends for all of eternity.

Methods for Tracking Spending

Have you overdrawn your bank account recently?  Are you running up balances on your credit cards because you don’t have enough money to cover your monthly expenses? Do you find yourself wondering where all your money went? Do you want to save money for a memorable trip, yet find your savings balance decreasing rather than increasing?    If you answered yes to any of these questions, you need to create a budget and set financial goals.

Creating and sticking to a budget will allow you to stay out of debt and achieve your financial goals.  However, you need to know where your money is going before you can create a budget that will work for you. Start by tracking your spending for a few months.

Cell phone with spending app open

In times past, most people tracked their spending using a notepad and pen. I recently found a spiral notebook that my grandmother used to record her spending in 1956. She used a separate page for each month. She listed her take home income at the top of the page and carefully noted each expense. As a single woman, she brought home about $275 each month, so it was imperative that she managed her money well. This method still works well if you faithfully write down all your expenditures.

I am a big fan of spreadsheets. When my husband and I started our own home twenty-five years later, I used a pen and paper method, too. But, a few years later, when Lotus 1-2-3 (precursor of Excel) was introduced, I graduated to using a spreadsheet to track income. Today, I use Quicken to track and balance my bank accounts, and I use a spreadsheet to develop our budget. I balance my checkbook every week or two to be aware of my spending and how much money is in my accounts.

Other people use different methods. I have friends who use the envelope system. On each pay day, they cash their checks, put their budgeted savings into their savings account, and allocate the rest toward expenses. The money for each expense category goes went into a separate envelope. They pay cash for all expenses, and when the envelope is out of cash, they spend no more on that category for the remainder of the money.

Today there are many apps to help you track your spending. Some can be connected to your bank accounts and credit cards. Some apps simply track your spending, while others allow you to input spending parameters and are indeed budgeting tools. Apps benefit those who do not balance their checking accounts regularly. According to StatisticBrain.com, 79% of people rarely or never balance their checking accounts.

Some of the most popular spending apps currently are:

  1. Mint. This free app can sync to your bank accounts and credit cards. It allows you to set goals, track investments, and be reminded of when to pay bills. It will also alert you when you have exceeded your spending goals.
  2. YNAB (You Need a Budget)–This zero-based budgeting system lets users allocate all income into spending categories, debt reduction, and savings. It also lets users set goals. The downside is that after the free 34-day trial ends, you must enroll and pay a monthly or annual fee.
  3. Goodbudget. This system mimics the envelope method. The user assigns an amount to each “envelope.” This method does not connect to bank accounts or credit cards, so the amounts must be entered manually. This is a good version for those who do not want all of their accounts connected. There is a free version, but if you want to track more than a few categories, you may need to pay a fee.
  4. Every Dollar. This method is similar to my method of recording expenses in Quicken and using a spreadsheet to track totals. Like Goodbudget, it does not connect to bank accounts or credit cards. All expenses must be entered manually. It does allow the user to set reminders to pay a bill.

There are many other apps available that you might want to consider. Choose a method based on compatibility with your style and personality. Mint or YNAB might be a good choice if you want to connect all your accounts without entering expenditures manually. On the other hand, these systems may not be suitable for you if you worry about identity theft and the risks of having things too automatic. So, set aside a few hours to evaluate the options available and decide to start using one of them to track your expenditures.

If you need help to learn to manage your money and improve your credit, please check out some of my other blogs on Finances, Money Management, and Stewardship. My book Honoring God with Your Money is a great tool for financial money management.

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