Financial Goals: How to Smash Common Obstacles And Reach Them

Riddle me this…who skips around lighter than a feather? No, not Fred Astaire. (Good guess though. ) It’s the person who’s reached their financial goals and achieved financial independence.

And the reverse is true as well. After all, the number one cause of stress is…money.

I know…shocker, right?

That stress is why the demand for financial advice is as high as it’s ever been (and the supply as well!) A quick Google search will prove that there’s no shortage of money gurus with advice to help you take charge of your money and reach your financial goals.

Over the years I’ve read much of this advice and implemented many of the techniques out there…and failed to stick with many of them.

I’ve saved receipts intending to track my expenses…and found them crumpled under my desk months later…uncounted.

I’ve set aside my debit card and tried using cash only to control my spending…but found that it was much easier said than done.

I’ve tried the 80/20 budget, the 50/30/20 budget, a zero-based budget, attended seminars and made heartfelt resolutions. But nothing stuck.

I know I’m not alone. We’ve all been there.

Why do we make all these wonderful plans but fail to execute them?

Why we struggle to reach our financial goals

As near as I can figure there are two huge reasons we struggle to reach our financial goals,

• A lack of awareness

AND

• A lack of convenience.

First, the lack of awareness has to do with not knowing what our money is doing. This is something that many of us deal with nowadays because of the technologies that are changing the way we interact with money.

Because of things like direct deposit, automatic bill pay and even debit cards, we never have to touch physical cash or write checks.  Instead, our money is constantly flying overhead in a swarm of electronic bytes without us giving it much thought.

This reality makes it far less likely that we’ll keep track of it.

Second, the lack of convenience refers to the tediousness or difficulty of a

task. And as you can imagine the more tedious something is to do, the less likely we are to do it.

Getting our finances under control to achieve our financial goals can be an extremely difficult task. Creating a budget, disciplining yourself to control your spending, tracking your expenses…it takes a lot of work. And that’s why most of us don’t stick with it.

Although I listed these two obstacles separately, the reality is that they are interrelated. We lack awareness of our finances because that’s what’s convenient and vice versa.

But ironically, while lack of awareness and inconvenience are the sources of the problem, I believe that they are also the keys to a solution.

Related Post: Dave Ramsey’s Baby Steps to Financial Freedom.

Awareness of your spending

When it comes to awareness, some may say “What are you talking about, man? I am aware. I know I’m broke!”

Yes, generally we’re aware of our current financial situation. But oftentimes we’re not aware of all the details that got us there.

Death by a Thousand Swipes

For example, realizing that you’ve overspent is relatively easy. (you just log into your bank, take a look at your balance and go “OMG” when you realize you have a lot less money than you thought).

But being able to pinpoint exactly when, where, and how you spent your money can be a bit more difficult. The fact is that we make our purchases with debit and credit cards way more often than with cash.

And this tendency to use cards creates a degree of separation between us and our money (which decreases our awareness).

If you’ve ever gone back and reviewed your bank transactions you may have realized that you didn’t spend all your money with one swipe of the card. Instead, what normally happens is that we become broke by a thousand little swipes.

You buy a little something here, and a little something there until suddenly you don’t have any money and nothing to show for it.

This constant draining of your bank account can quickly lead to financial hardship if you’re not careful. Nobody wants that, and there’s no reason to put yourself through a completely avoidable tragedy.

Track Your Expenses

So what can you do to become more aware of your finances? The best way I’ve found to help me with the problem of awareness is by tracking my expenses.

But as I mentioned above, tracking expenses is super inconvenient, which makes it extremely difficult to be consistent about it. So, I’ve found software to do it for me!

Personal Capital is a financial and wealth management software that keeps track of your spending. With it, you can set your own goals, create a budget, and monitor your net worth and investment activities.

All in one place.

You simply connect it to your bank account and it tracks every transaction you make with your card. Which makes it invaluable in tracking your expenses.

Honestly, at first, I was a bit skeptical about allowing software access to my bank account and spending habits, but it’s very secure and I haven’t had any problems with it at all.

If you want to track your expenses the easy way and raise your awareness of where your money is going then you definitely want to take advantage of this free software! Sign up for Personal Capital today through our link and start to regain your financial control.

Related Post: Why You Must keep Spending Money on Yourself.

Dangerous cards vs. Inconvenient cash

Another idea you may consider to control your spending is to use your debit card less.

The problem with using your debit card is that it’s extremely easy to overspend and get yourself into trouble.

Using cash can prevent you from overspending and keep you on budget, but it also can be extremely inconvenient to have to make continuous trips to the bank and carry only a limited amount of money. So what to do?

Well, one possible option is to use gift cards.

For example, let’s say you’re a Starbucks addict and you budget $25 for Starbucks every month. You can buy yourself a $25 Starbucks gift card at the beginning of the month and use that until the balance drops to $0. Once that happens, you’re done for the month.

Gift cards will allow you to enjoy the convenience of debit cards while avoiding the dangers.

If you want to apply this idea generally instead of a specific store, you can buy a Visa gift card and use that for budgeted items.

Awareness of you credit score

It’s not just spending, there are many other areas of our finances that we’re in the dark about.

According to a 2017 survey, nearly 30% of people admitted that they don’t know their credit score.

It would have been fine if you didn’t know your score 30 years ago (that’s when the FICO score was first introduced by the way), but not today.

The thing about credit scores is that they affect more than your financing options. Today, wireless carriers check your credit, your landlord checks your credit, the utility company checks your credit, insurance companies check your credit, even employers may check up on your credit history…

The point is, your credit literally affects the most basic aspects of your life and also how difficult it is to reach your financial goals.

Not being aware of your credit score and what affects it can cause real problems.

And, of course, the best way to know your score and what’s in your credit report is to check it periodically. The problem with that is it’s not convenient to request your report. (In reality, it’s not that difficult but if it were easier more people would do it.)

So what to do? Let’s make it convenient!

Credit Sesame is a FREE app that, gives you an estimate of your credit score immediately whenever you want it. But more than that it also helps you understand all the components of your credit score and how you can improve them.

If nothing else, the fact that Credit Sesame puts your credit score at your fingertips makes you aware of it. And that awareness alone will make you less likely to damage your score.

Take charge of your credit today by signing up for Credit Sesame through this link.

Related Post: Money Management Hacks You Can Make Over Coffee. 

Inconvenience of Saving

Did you know that 65% of Americans save little or nothing?

A similar article says that 63% of Americans couldn’t come up with $500 to cover an emergency.

Certainly, there’s no shortage of articles out there talking about this issue. But have you ever wondered why so few of us seem to save money?

Part of it is undoubtedly related to our overspending. Not placing reasonable limits on our spending will cause us to quickly blow through any money that could have potentially be saved. But Personal Capital will help you see where your money is going and create a reasonable budget.

The other reason that many of us don’t save is additional expenses that always crop up at the wrong time.

How can you be expected to save anything when life keeps getting in the way? Well, there’s one option that can help you save little by little with no effort on your part. It’s called Digit.

Digit is what I use to save, and it’s a lifesaver! This app makes saving super convenient and makes it so you don’t even have to think about it. Simply tell Digit what to do, set a few limits and let it go.

Another benefit to using Digit is that the money you allow it to save is removed from your account and saved in another account under Digit’s control. This takes away the chance that you will inadvertently spend your savings.

If you’re tired of living under the threat of any little thing causing you financial hardship, then you definitely need to start saving for a rainy day. Because that day will come! Start preparing your rainy-day fund with Digit today!

Wrap-up

In my opinion, the two biggest issues that cause us to struggle to reach our financial goals are a lack of awareness and a lack of convenience.

Bad financial habits are hard to break because they’re so convenient and you don’t have to think about them. While good financial habit is extremely hard to adopt because they are so inconvenient to take a great deal of our attention to sticking to.

The trick though is to find tools that can make it convenient to adopt good financial habits and automate as much as possible so you don’t have to think about.

Personal Capital, Credit Sesame and Digit are three such tools that will go a long way to helping you get back on the right financial track. With discipline and the right tools, you are bound to succeed!

Cheers!

Related Post: How to Effectively Set The Right Types of Financial Goals.