Humans by nature have a competitive drive that compels them to succeed. Great athletes are committed to their training because they want to be the best, and anything less than a championship isn’t enough.
If you’re not an athlete, this urge to prove yourself often manifests itself in the car you drive or the house you live in. But to properly manage your money, you need the dedication of a pro athlete to train your mind and create winning habits.
But if you’re the financial equivalent of a couch potato, you can’t expect to become an IRONMAN overnight. You need to start from where you are and create a plan that works for you.
How to Get Started
To reach your personal finance goals, you need to train your mind to stay within a specific budget and have the commitment to stick to your goals. Here are four steps you can take to prepare for the marathon of personal finance:
1. Put your goals in writing. Many athletes have their team to hold them accountable, but since personal finance is usually a solo venture, writing down your goals can help. Maybe you just want to be debt-free by a certain date, or perhaps you’re trying to save a specific amount for retirement.
When setting goals, it’s important to be specific and realistic about how much of your income you’ll be able to save or put toward paying off your credit card each month.
If you’re thinking of buying a new home or a nice car, do some research to figure out exactly how much it’s going to cost. (This includes taxes, insurance, maintenance, etc.) Don’t leave anything out! Give yourself some cushion in your financial planning for times when unforeseen expenditures interfere with your plans.
2. Assess where you are compared to where you want to be. World-class runners always know the race times they want to achieve, and they train with that goal in mind. Once you’ve listed your current expenses and goals, brainstorm possible ways to cut spending to reach your ideal financial situation. Where are you now compared to where you want to be?
3. Consider possible ways to increase your income. Evaluate how a second job, a promotion at your current job, or furthering your education could help you reach your personal finance goals. Carefully evaluate whether the income generated from these options will be worth your time and investment.
4. Put your plan into action. No matter what level you’re at, you’ve got to start somewhere. For Rocky, it was just a matter of getting out of bed, putting on his sweats and sneakers, and training before the sun rose. Put your routine into action, and stay committed — even if your plan falters from time to time.
3 Lessons for Winning in Finance
Once you put your plan into action, it’s important to maintain a winning mindset. It takes many athletes up to eight years of training to make an Olympic team, so it’s crucial to have the tools in place to maintain motivation.
1. Remember: Financial success is a marathon, not a sprint. Most athletes will tell you that a slice of cake once a month isn’t going to kill you. But if you indulge in a slice every other day, it starts to become detrimental. The same rule of moderation in the long haul applies to amassing wealth.
To remain financially healthy, you need to develop the foresight to see how unnecessary expenditures can derail your financial goals in the long term. It’s OK to treat yourself every once in a while, but those weekly shopping sprees and daily lattes add up. Reaching your personal finance goals is an exercise in patience and long-term dedication.
2. Winners never quit, and quitters never win. You’ve heard this one before, right? Even the best experience failure, but how well you bounce back from setbacks and learn from them ultimately determines whether you reach your goals.
“I’ve missed more than 9,000 shots in my career,” said Michael Jordan. “I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game-winning shot and missed. I’ve failed over and over again in my life. And that is why I succeed.”
Don’t use your failures as an excuse to put your dreams on hold. Just get back on track, and keep moving forward.
3. There’s no “I” in team. Tim Rees asked nearly 200 elite golfers about their support systems. He found that during stressful matches, golfers with strong support systems performed better than those without. Similarly, your spouse and loved ones can be huge sources of support and motivation in your financial journey. Make sure your family understands your goals and is committed to helping you reach them.
Just as athletes don’t expect to win every single game, you shouldn’t expect to become a millionaire overnight. The road to financial success is a rocky one, and life will throw you unexpected curveballs. The key is a consistent, long-term commitment to saving and spending wisely. If you can do that, you’ll retire with plenty of wins under your belt.
Daniel Wesley is the founder of DebtConsolidation.com, a website that specializes in debt-relief services for businesses and individuals.
Photo: Patrick Theander
Just my thoughts on the increase your income category. In addition to physically increasing income, a reduction in unnecessary spending as well as paying down high interest debt are both great ways to effectively increase income.