You're Not Going To Win The Lottery. It's Time To Sort Your Finances Out
Apologies if the title seemed a little aggressive, you know that's not how I roll! However, through having many people talk to me about their finances and just hearing people talk in general (as a blogger, you remember everything relevant to your blog topic!), I have noticed that many, many people are waiting for something to happen that will sort their financial situation out.
Examples of this could be winning the lottery, waiting for an inheritance, or simply not realising that time is quickly running out and you could be approaching retirement age before you realise it has crept up upon you. Many of us don't like to admit this kind of thing to ourselves, because it means looking quite frankly at your financial situation and facing up to the fact that you may not be exactly where you would like to be.
If you are honest with yourself, right now, think about where you would like to be financially, and then think about if you have achieved any of that. I don't mean being a millionaire or something, but reasonable goals that most people have, such as:
- House deposit saved up/first home bought
- Debt free
- Mortgage free
- Healthy work/life balance
- Retirement fund
- Financially independent (not relying on parents, partner etc)
And so on, and so on - whichever financial goals you may have for your life. Do you like your job? If you want to find a new job, could you do so easily? If you lost your job, how long would you be ok for financially?
The problem is, we think that we have time. But time is one of those things that just run away from you, and before you know it you look up and twenty years have passed and you're still stuck in the same place. Now to me, that sounds really frightening - I don't want to be in the same position, especially if it's an unhappy one - I want to have no regrets, to have tried my best and hopefully be exactly where I want to be (although I know sometimes that may not be exactly where you had planned!).
Before you get started on working on your finances, I believe that a good place to start is creating some goals. It's proven that writing down goals makes you much more likely to achieve them, so don't dismiss it and think that it's a pointless exercise - because it could be one of the keys to your success.
Goals need to be realistic, but also push you at the same time - there's no point in saying you want to be a millionaire tomorrow for example, but you could definitely crunch the numbers and make this happen in ten years or so (just throwing out a number, this would obviously be different for everyone!).
This is where you need to be really honest with yourself about the parts of your life you are unhappy with (something we all find hard to admit) - but it's ok, because these goals that you are setting will help you set change in motion and make future you much happier.
Make some time to sit down and do this, because it will be worth it! Brainstorm a bunch of ideas, and write them all down - you don't need to do them all, it's just brainstorming at this stage, but it will help you to think about it all - write down all different areas such as relationships, work, passion projects, family, travel, living arrangements etc.
After all of your brainstorming, look at the things that stand out as being truly important to you - the ones that you know deep down that you will regret if you look back on your life when it will be too late to then accomplish them. These are your life goals, and they are the things that you should aim to do.
Create a Plan of Action
Ok, life goals are now created! The next step is to create a plan of action to create these - I find the best way is to use the method where you work backwards to see the steps that you will need to take in order to reach that goal.
For example, say that one of your goals is to own a house in a particular area, then you could look at how much they are, then work out how much deposit you would need (obviously the more the better), and that amount is the goal that you are working towards. Once you know that amount, you can break it down from there, to see the steps that you will need to take in order to achieve it.
There is no point in thinking of goals that you want to achieve if you aren't going to then work out how you need to achieve them, which is why this is so important.
Start Budgeting For The Win
If you've read anything by me before, it's pretty likely that I will have mentioned how important budgeting is. Most people are horrified by the idea of creating a budget, for many reasons such as it sounds boring, a waste of time, they know their finances already, don't want to face up to the numbers etc...but the fact is that a budget is a clear way of seeing how your money is flowing in and out.
The basics of budgeting are writing down all of the money that you have coming in (wage, benefits, dividends etc) and all of your outgoings (your bills etc). The area in which it's easy to get it horribly wrong is the outgoings, as if you are not already doing some form of budgeting, chances are that you aren't actually aware of how much you are spending each month - with things like food shopping being one of the main ones.
My personal favourite method of budgeting is the Zero Sum Budget method, which is basically where you allocate all of your money to various pots. Typically what will happen is the money comes in, and it will go out to pay for various bills, and then whatever is left over gets spent. A lot of the time it will be spent on unnecessary stuff, which is what we don't want to happen!
When you have worked out your budget and made any necessary cut backs, you will then see how much money you are left with to achieve the goals you have created. If you know that you need to save a certain amount each month to reach your goal, the budget will allow you to do so.
Side a Side Hustle/Extra Income Stream
If you are following these steps in order, which I hope you are, you may see that you need some extra money in your budget to allow you to reach your goals - and a great way of doing that is to start earning extra money on the side of your main job.
Earning extra money completely changed the game for me, and I'm forever grateful to all of the money that I have earned from doing things that I love - there's no reason you can't do the same as well! Earning extra enabled me to pay off my debt, take my daughter on holiday, deal with a job loss with no worries, reach some personal goals, and it is helping me work towards other personal goals as well.
My favourite ways of earning extra that I personally do are:
- Dog Boarding
- Mystery Shopping
- Matched Betting
- Answering surveys
- Selling my stuff on Facebook, eBay, Gumtree
Earning extra money changed things for me so much, and I will always continue to do it, although the methods of doing so will probably change throughout my life.
My favourite thing about starting another income stream is that you can dedicate that income stream to your particular goal, and not touch your wage from your main job, so it doesn't feel like you have to cut back at all, but you still reach your goals.
Your goals probably involve needing extra money, so earning extra on the side is a great way of reaching these goals. You can also try and earn more money in your 9-5 by asking for a pay rise, and it may be worth checking out this article which shares why you aren't paid what you think you are worth.
Hesitating on the beginning of your journey to achieving your goals is the ultimate killer of success - because there are always reasons why you shouldn't start something (don't have the time etc) - so it can be put off and off until it's never actually started.
It's a simple fact that the best day to start is today (or yesterday...). You won't regret starting on whichever path you want to go down, today.