As young professionals who have overcome the post-grad struggle and are finally starting to build our careers, we understand the value of money. It may not be the only thing we care about, but having enough of it to live well and enjoy life with our loved ones is essential. Instead of mindlessly spending money then awaiting our next paychecks, we should re-examine our habits and utilize the power of focus.
Step 1: Determine your top 5 “big” goals.
While the devil is in the details, it’s often helpful to start by looking at the bigger picture. A few times a year I sit back and think about my overall financial goals. Although this can seem a bit esoteric initially, it doesn’t have to be. Simply identify your most important financial goals. As a young resident physician my top 5 goals are to:
1-Be completely debt-free;
2-Own a home;
3-Take international vacations;
4-Give to charity;
5-Be financially independent (aka have the flexibility to work less without worrying about money)
What are your top 5 financial goals?
Step 2: Write down a few things you must do to achieve them
Once you determine the financial goals that are most important to you, write down ways you plan to achieve these goals. For me, that means tracking my spending and sticking to a budget. It means saving a percentage of my income each month and investing money towards retirement. If I’m being honest, it also means staying away from the mall so I’m not tempted to buy cute clothes and new dresses whenever my favorite stores are having a sale. It even means forgoing the temptation to buy things online after seeing new home décor ideas on Pinterest. Most importantly, it means eliminating any consumer debt and having the self-control not to accumulate more in the meantime. What are some things you must do to reach your larger financial goals?
Step 3: Choose one thing to change about your finances over the next 6 months
To be honest, I’m eager to become financially independent. I wish I could snap my fingers and erase my massive student loan debt and have millions saved for retirement. Don’t we all? Unfortunately, life doesn’t work that way. Realistically speaking, it will be about 10 years before my student loans are paid off or forgiven. I’ll be well into my 30s before I can comfortably purchase my dream home and in my late 40s before I can truly become financially independent. Although both of those goals can seem far away, there are several things I can do now to put myself in a great position going forward. However, trying to do all of them at once can be daunting and unsustainable.
I’m the type of person that needs to see progress. I need to feel as though the sacrifices I’m making (aka the cute clothes I’m not buying and lavish vacations I’m trying hard not to book) are actually worth it. Thus, I find it helpful to focus on one thing. Choose one change you want to make in your finances over the next 6 months, whether that’s trying not to spend more than $100 on take-out, putting $300 into a savings account every pay period, or contributing 10% of your salary towards retirement. Choose one thing to stick to over the next 6 months. My one thing is eliminating the credit card debt I accumulated in grad school. What is your one thing?
Step 4: Laser focus on that one thing
Once you pick your “one” thing. Laser focus on it. Since I’m someone who loathes consumer debt, I’m laser focused on eliminating it. How? By literally throwing money at my credit card balance each month. As a resident physician, I’m definitely not making the doctor salary people google online, just yet. I don’t drive a Tesla, own a large home, or spend money frivolously without remorse. However, as a single person with no kids, who is an employed physician, I make enough to pay off my credit card debt. In fact, despite having a negligible “minimum payment,” I send in a several hundred dollars each month and should be credit-card debt free by the end of the year. I realize everyone’s financial situation may be different, but we should all laser focus on one thing. In what way do you plan to do this?
My point? Instead of getting bogged down by large goals that seem far off, I have found it helpful to focus on one small goal every 3-6 months. I like to see progress and achieving these small goals will give me the momentum needed to continue along the journey to reaching my larger goals. What do you think? Is this a strategy you believe will work for you?