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Inspiration

7 Steps to Win with Your Money!

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Setting intentions, or goals, is a great way to be productive in life. It works with money just like it does with healthy living, house cleaning, or home projects. You figure out where you want to be or what you want to achieve and then you follow a plan to get there. Your Financial Intentions are the goals you set for your money. Read on to see the steps to win with your money to become debt-free, prepare for the future, and live your best financial life!

Hands up if this has ever been you…

Payday rolls around, you buy groceries, put some gas in the tank, go out to eat and maybe to a movie. Three days go by, and suddenly you have about $1.68 left in your account, and you’re looking at the calendar wondering how on earth you’re going to get through the next ten days until your next cheque drops?

Okay, so that’s a dramatic example (although I feel like it accurately captures 20-year-old, university-life me).

Bottom line: If you don’t make a plan, your money will NOT do what you want it to.

We are (finally) winning with money. That’s not to say that we are rolling around in a gold pool full of hundred dollar bills. But we are on our way to being set up for early retirement, and we never have to worry about using the MasterCard to cover groceries until payday.

The reason we are winning is that we have a PLAN! It’s not a secret plan – I read Dave Ramsey’s Total Money Makeover and honesty you guys, it has changed my family’s life! The method below is Dave’s baby step plan, with my two-cents tacked on!

Focusing your intentions, 1 step at a time.

Focusing on one step at a time allows you to really make progress with your goals.

There are seven steps to win with your money here, but don’t let them overwhelm you. Where you start is based on your current money situation. If you are in any debt at all, start at step 1. If you are debt-free, skip ahead to step 3! Wherever you start, the point is to stop spreading your focus out, but get intentional with it. Laser-focus your work onto one step at a time and you’ll get to step 7 (live and give like no one else!) faster!

Step 1: Save one thousand dollars.

What?! How far is one thousand dollars going to get me? Shouldn’t I be paying off my student loans before I start saving?

Yah, I get it. But emergencies WILL happen, and if we are going to quit the habit of using credit cards to bail ourselves out (talking from my real life experiences here), then we have to have a little cushion for ‘just-in-case.’

Step 2: Pay off all debts.

Every. Single. One. Maybe you have a lot. I know I did. But you can’t win with money when you are giving half of your income to the bank each month.

The ONLY debt you get to hang onto (for now) is your mortgage if you have one. Read more about how to get rid of the debts with these steps. And quit using the credit cards, while you are at it! You won’t get out of debt when you keep creating more.

Step 3: Save 3-6 months of expenses.

This is a full-blown emergency fund. A pile of money you are going to tuck somewhere safe and then not touch. It’s not there for you to go to Jamaica at Christmas, or to renovate your office. (Not gonna lie, I’ve considered using mine for BOTH of those things, this month!) You are going to save that money and then forget about it, so that if for some reason you need it (job loss, house flood, car accident), you are protected from slipping back into old habits. This is a buffer between you and the chains of debt.

Step 4: Save 15% for retirement.

Do some math and see where you are at with your retirement investing. My pension is about 11%, so I’ll start putting 4% of my earnings into an RRSP asap. Make sure you are putting away 15%, and start as young as you can. The longer your money is invested, the harder it will work for you.

I won’t pretend to understand the world of investing, but there are lots of wonderful people who do. In Canada, check out Canadian Couch Potato or Maple Money, or in the US connect with a Ramsey-recommended Smartvestor Pro in your area to help you get started in the world of investing!

You need to know that your money is in good hands and working hard for you.

Step 5: Save for education.

If you have young kiddos, now is the time to start saving. I’m not saying you have to prepare to foot the whole bill of post-secondary education. I paid my way through university, and I think there is merit in working and supporting yourself as a young adult.

BUT.

I JUST paid off the last of my student loan in December, and I graduated in 2007. Ugh. I know if my folks could have helped me, they would have. And I did work a LOT during university. But I also didn’t have any money smarts, and I didn’t want to or know how to budget and…and…and.

At the end of the day, you decide how much you want to save to help your kids through school. But start as early as you can! Saving $100/month from the time they are two years old is a heck of a lot easier than starting when they are 15 and trying to make up for lost time!

Step 6: Pay off your mortgage.

I was talking big, financey dreams with someone recently, and they were telling me how much they wanted to stay at home with their kiddos, but that was only possible if they didn’t have a mortgage. So I said “Work at paying it off!” and they looked at me like I had three heads.

My generation seems to operate with the idea they HAVE TO have a mortgage forever. (This is a sweeping generalization – if you are working on paying yours off, or already have, BIG high fives from me! I’m not talking ALL people. Just, seemingly, MOST people.)

The thinking seems to be: Own a house, have a mortgage forever. It’s time to change that mindset. I’m starting to chunk extra money onto my mortgage this year, and my goal is to have our home paid off in 7 years. What a fantastic feeling it will be to OWN this house, and also to have all that extra money at my disposal each month to invest, donate, and adventure with!

At the top, I told you to focus on one step at a time. You can work through 4, 5, and 6 together. Start 4 & 5, then put as much on step 6 as you can, and live a little too!

Step 7: Live (and give) like no one else.

Stop what you are doing for a second and imagine yourself with no debt, solid retirement and education savings, and no mortgage payments. My face just automatically smiles with the thought of not having any of those financial obligations on my shoulders, as I imagine all the people I can help and the adventures I can go on with my family.

We have a list of projects we want to do to give back to our community, from donating new bicycles for children transitioning out of homelessness, to starting a scholarship fund for students who are committed to debt-free education, to supporting Diabetes research and treatment. The list goes on and on. I encourage you to create your own list and look at it when you are feeling discouraged on this journey.

Beyond the ability to give back and truly HELP people, our family will undoubtedly enjoy the adventure and opportunities that will come with Step 7. Our travel bucket list is LONG, as is the list of home projects we want to start. Being completely debt free will open up SO MANY doors – I can’t WAIT!

I realize that these steps take years (and a lot of commitment) to complete and that there are often roadblocks along the way. But I believe in my heart that by setting these intentions, I always know what my current focus is and it keeps my head in the game so that even when setbacks arise, I work through them and get back on track quickly.

These seven steps to win with your money will take some time and patience, but they will also start impacting your life right from step one! You can start at the beginning, or jump in at the step that makes the most sense to your finances. Wherever you are in your journey, whether you are just thinking about starting Step 1 or you are already rocking Step 7, celebrate yourself, where you started and where you want to go.

You are intentionally seeking information and inspiration to reach for more in your life – high five!

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