Welcome to our January 2024 Q&A session, where we delve into the heart of your financial queries. In this roll up, we’re committed to providing insightful answers to your most pressing financial questions…i.e. the things you’ve googled. Whether you’re pondering how to set and achieve financial goals, strategizing on saving money, or seeking guidance on building an emergency fund, our expert insights are tailored to address your unique financial concerns. Now first things first.
How to set financial goals, and save money.
Ironic. I googled what financial questions and topics you are googling. And in an effort to be a part of the answer or solution to your googling quests, I’m chiming in with my own spin and approach to some of your top money-ish searches during the iconic month of goal setting – January.
Here’s the list of financial topics we’re diving into.
- How do I set and achieve financial goals?
- How to save money?
- What strategies can I use to cut unnecessary expenses?
- How to build an emergency fund?
How to set and achieve financial goals
It’s January if you’re reading this soon after the publish date. That means that resolutions are in effect. Or maybe you’re a word of the year person. It’s goal month, people – you’ve likely thought about what you want to change up in this new year.
May I challenge you first to write out what you want to continue first?
That’s right – continue. What do you want to KEEP doing that’s been serving you? I bet you have a few good habits under the hood that you should call out and recognize.
- Perhaps you have a great habit of walking daily. Mad props to you – keep it up.
- Maybe you have a morning routine of stretching, devotion and quiet time that is helping you rock your days.
- Likely if you think about there are several habits that are going to stay with you.
So what, Sarah. Why do I need to call these out?
I want you to appreciate them. Even if it’s just for 3.5 minutes while you read through this blog. We (myself included) don’t have great track records of actually giving ourselves credit where credit is due. We’re quick to get ready to change something, add a task to help get to a new goal – but often skip the pats on the back altogether.
Just try it. Write down 2-3 habits that you want to keep.
NOW, let’s move on to the ones you want to change up. Notice I didn’t say start new. I said change up.
Breaking the Mold: Changing Unproductive Habits
Before we talk about what you want to start doing; like saving more money, or dropping 10 pounds – let’s talk about what you want to stop doing first.
Are there habits that are NOT serving you that you want to quit?
I always think about quitting smoking when I use the word quit. Maybe nicotine isn’t what you need to step away from this year.
- Maybe you want to stop snacking after 7pm.
- Perhaps you want to quit scrolling through Instagram after 9pm.
Write down 1-2 items you want to stop doing.
We’re getting quite a little list here, aren’t we? And we haven’t even touched all of the new resolutions you’re making yet.
Now, go ahead and jot down a few items you want to start doing.
- Maybe you want to put more money in your savings account, or pay down your debt.
- Perhaps you want to increase your retirement contributions or try to get into a home of your own.
- I know, you want to start going to the gym – like everyone else in the neighborhood.
Alright you have a couple of items in the continue pile, at least one stop and a few in the start category.
Setting Strategic Goals: A Step-by-Step Guide
I want you pick 1 to stop and 1 to start – you can keep all of your continues.
What? Only one of each!?
Yes. You can add on later my friend, but what I’ve found through years of coaching and leading people is that we can really only handle a couple of big bucket items at a time. Really, one at a time is ideal. We get to build momentum and get narrowly focused on what we’re doing with something as difficult (I’m not going to sugarcoat for you) as stopping a habit or starting a new one. It takes serious effort and practice.
So, how do you set and achieve financial goals?
Same as you do any of the above. I recommend one at a time, and really those goals are going to come down to habits you put in place that you can track on a regular basis. Let’s break one down, shall we?
Developing Key Habits: The Path to Goal Attainment
Say you have a goal of paying down your credit card debt. Great idea, but super vague goal.
Let’s get more specific. You want to pay off your Chase Venture credit card with a balance of $12,000 by the end of the year. Much more specific – loving it, but still not enough to get you to goal. You need a plan to take you there month by month.
You know your finances best – can you throw $1,000 each month toward that card? Maybe the winter months are slim for income for you but the summer months you have extra – make your plan accordingly. For demonstration purposes, we’ll keep the easy math – you’re going to put $1k each month towards that card, and even more specifically you’re going to put $500 per paycheck. In order to do that you realize that you’re going to need to adjust a few of your spending habits, including eating out – so instead of eating out 2-3 times per week you’re going to eat out no more than twice per week and in addition to that you’re going to track your spending each week.
Tracking Progress: Weekly Habits as Success Indicators
You now have two unique habits that you can monitor weekly to help measure your likelihood of success toward your larger goal.
You still with me? Those lead measures – did I eat out only twice this week, and did I track my spending weekly, are habits that you can monitor your success of. Each week you can visually give yourself a Yes/Yes or a Yes/No or Checkmark/X – you get the idea. You are going to stop worrying about the $1,000 or even the $500 and focus on those small habits to help you reach that larger goal. That’s how you go about setting and achieving your financial goals.
What should you pick? I’m a big fan of Ramsey’s Baby Steps for choosing your financial goals. You can read more about those steps here.
If you want a worksheet to plan out your goal getting, you can download one of my own making right here – complete with this goal framework and habit statement creation.
Since we wrote out that goal around debt payoff, let’s dive into some more specific money talk.
How to save money. What are the best strategies for saving money?
Let’s first define saving money. Seems silly, I know – but what I think you mean is one of three things.
- How to put more money into a savings account for a rainy day, or emergency fund.
- How to save money to spend on something else, likely a bigger purchase later on.
- How to find money to put toward a different goal; like debt payoff.
How to put more money into a savings account for a rainy day, or emergency fund.
Yes! I absolutely want you to have an emergency fund. An emergency fund allows you to cover your own emergencies. You get to independently handle your own $#@%. Not your Visa or Discover. Defintely not a loan from your parents. And not a personal loan to payoff down the road. You.
A starter emergency fund isn’t nearly enough to cover all of your emergencies – but it would cover one. Maybe it’s $1,000. Maybe it’s 10% of a ‘fully funded’ emergency fund for you. You get to choose – but the method I’m going to recommend that you save for that rainy day fund is scrappy and fast.
Outside of doing anything illegal, I want you to fill that baby up ASAP. Sell items from the garage, work some extra overtime, offer to babysit the neighbor kids, or skip eating out for two months – I don’t care what it takes, but get there.
Now, before we jump off of this emergency fund train I need you to also call out what an emergency is to you.
Right now, in a non-emotional moment I need you to write down what may fall into the bucket of emergency in your life…and also what might tempt you to use those emergency funds, that aren’t really an emergency. Again, calling this out in a non-stressed/non-excited moment is going to be helpful, I promise.
How to save money to spend on something else, likely a bigger purchase later on.
Once you determine how much margin you have for your goals (we’ll tackle this in a minute when we chat about budgeting) it’s a simple math equation.
First figure out the total. How much money do you want to have saved for a down payment for a home? How much is that vacation to Hawaii going to cost you?
Next figure out your ideal timeline. Do you want to purchase that new home in two years? Take that total you figured out and dived by 24 months – that’ll give your monthly goal amount.
Let’s use Hawaii as an example. You’ve done your research and that anniversary vacay for you and your better half is going to cost you $4k and you want to do it over your anniversary which is 8 months away. 4,000/8 = $500/month
I recommend that you treat that dollar amount like a bill. Not necessarily a non-negotiable bill, because life may happen and something pressing may come up – but a really important expenses nonetheless. I like setting this up as monthly transfers into an ‘annual spending’ savings account. The amount I need monthly is set up to auto transfer the 15th of each month. When I go to purchase items from this account (like an annual ski pass, airfare tickets for our vacation, etc.) the money is ready and waiting for me – no mess, no fuss.
How to find money to put toward a different goal; like debt payoff.
You need to know your numbers. You need a plan for your money. Not just a checklist of when your bills are due. You need to make a plan, in advance for your money…and then follow it, and track to see that you stay within the boundaries of your plan. Most of us call this a budget.
Friends, a budget doesn’t have to be restrictive. It shouldn’t a be a NO FUN FOR INSERT YOUR NAME HERE PLAN.
It should be a realistic plan for what you spend on typically, and atypically – don’t forget the one off items that surprise you like Father’s Day and your 7 nieces’ birthdays. A budget simply gives you a handful of categories, and boundaries for spending within them. Maybe in February your GIFT category is going to be $250 because your spouse loves flowers and chocolates and in March – April it’s $25 because you just have that one friend to buy for.
When you know what you need to spend on, and become aware of what you have been spending – you can make edits and adjustments and ultimately end up with margin, or leftovers to put toward your goals. This is, intentionality. This is how you put money towards your goals.
If you’re not sure where to start when it comes to creating a budget, check out these past blog posts.
What strategies can I use to cut unnecessary expenses?
Awareness is a really powerful tool. Try this exercise out – go look at your last 3-6 months of expenses. Pull up your credit card statements, bank account, etc. and add up your key categories. I’m not so worried about your staple bills here; you have electricity to pay for, housing, and a car payment – but I want you to come to grips with how much you spending on eating out (or delivering in), groceries, and shopping. That includes…Amazon shopping.
Once you figure out those numbers you can decide if you’re comfortable with those amounts. Were they more than you expected? Less? It’s rarely ever less… Now determine what you WANT to spend on those categories. If you have a great divide between the two I’m going to recommend that you titrate down. Work towards your goal over a few months time. Cold turkey or deep reductions often aren’t sustainable long term.
Next up if you’re ready to continue cutting unnecessary expenses I want you to get clear out your expenses and mark your wants/needs and musts. Your musts are your housing, basic utilities, groceries and transportation costs. These are your basics to survive – you need food, shelter and a way to get you to and from places to earn a living.
Needs will likely be daycare expense, internet and phone bill and replacement shoes and clothing. You follow me here?
Wants are…well everything else.
Balancing Act: Prioritizing Credit Cards and Wants
Wait, what about my credit card payments – where do they fit on the list? Honestly – it totally depends. If you don’t have enough income to cover your must haves and your needs – then you have no business with any wants or credit cards – you’re surviving right now. If you DO have enough income to cover your musts and needs, then credit cards should likely come before your wants.
This exercise again isn’t meant to take away your birthday, your Starbucks addiction, or your love for Girls Night every Friday. It’s meant to help you get clear that what you are saying yes to – is not a necessity. As much as you ‘deserve’ to let loose after a long week or to get fueled up with a mermaid coffee – you need to be clear about what you call it, it’s a want.
Are there any of those wants that you could pause on for a period of time? Is there a reduction in the amount of times you participate? Or the amount that you spend when you participate? Coffee made at home is just as effective as the mermaid brew, at least 4 days of the week – maybe you treat yourself on Mondays. Hey, you asked about how to cut unnecessary expenses. Don’t shoot the messenger.
Exploring Money-Saving Strategies: A Compilation of 65 Ways
Saving money is a hot topic, and I’ve collected 65 ways for you to save. Check out these three blog posts.
We’ve covered a lot of ground here – but there’s more where that came from. In the future we’ll cover topics such as:
How can I create a realistic budget and stick to it?
What are the basics of investing, and how do I get started?
How can I improve my credit score?
How to get out of debt?
Should I focus on saving for retirement or paying off debt first?
How can I protect my financial well-being during economic downturns?
If there is something you’d love for me to cover please send me a DM over on Instagram.
As a financial coach I often get a wide range of financial questions from individuals, couples and entrepreneurs seeking guidance on their personal or small business finances. By and large my advice is tailored to that unique situation and circumstance of my client – based on their goals. The dialogue here is some of my ‘general rule of thumb’ advice, but you’ll come to realize that I’m a big fan of you making a specific and unique plan based off of your money, and your goals.
While we’re here talking about coaching, here are a few frequently asked questions when it comes to financial coaching.
Financial Coaching FAQ
Why is a Financial coach different than a financial advisor?
A financial coach support the individual with habits, strategies and coaching to help guide their behavior when it comes to money management. It’s the daily, weekly and monthly stuff – often times we’re covering so much more than just money, because money touches so many aspects of life. Don’t believe me? Check out last month’s client success story with Ashley.
A financial advisor primarily focuses on the behavior of your money in the market, more than your behavior with money. They want your stocks, bonds, and investments to yield the best return for you. Now a financial advisor CAN touch on how you behave with money – but they generally aren’t committing the amount of time and energy to the daily ins and outs the way a coach does.
Neither are wrong, just different. I personally believe that we’ll each need (or needed) a coach in our corner at one point, and often transition to an advisor in other seasons – sometimes circling back for coaching support at times too.
Who do you work with?
Journey to Influence Coaching works with individuals, couples and business owners. My sweet spot is entrepreneurs – passionate and motivated individuals that didn’t get into business for the ‘business’ side of things, but find themselves needing a little more support there.
What do you do as a coach? How can you help me?
My role is to help guide you to get the results you’re after. Sometimes we uncover goals that you didn’t realize you had. Other times we revise goals, or simply crush the ones you came with. I bring different perspective, strategies and questions to help you get to where you’re going. You’ll understand yourself better, your money and habits better and level up not only what you’re doing with money management, but change your future and your legacy for generations to come. Super cheesy, I know – but absolutely possible.
Where do you meet clients?
Primarily, on Zoom – which means that I serve clients anywhere in the U.S.
Soon, I’ll be offering limited appointments in my Portland, OR metro based office.
What’s the best way to get in touch with you?
I’d love to chat. Schedule a call that’s convenient for you.
In the meantime, thank you for joining me on my journey to influence.
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