In order to get where we want to go, we need to get really specific about our desired outcome.

Getting out of debt is just like losing weight – you need a plan, and you must follow it. No matter how fancy or scientific your weight loss plan is, losing weight the healthy way comes down to “calories-in” versus “calories-out”. It’s the same concept with your finances, “money-in” versus “money-out”. The math is simple enough. The changes that must take place in order for this basic math to add up, however, can get complicated. My clients come to me because they need a plan. There are a lot of emotions involved, but after we’ve finished working together, they have an understandable, realistic plan which incorporates focus, discipline, and determined goal setting.

When you set a goal, and you do everything in your power to achieve it, most likely you will make it happen. This is the Spiritual Principle of Cause and Effect. If your goal is to go to the gym, you will take the steps to get yourself there. If your goal is to get out of debt and start accumulating wealth, you will also take the steps to get there. The only reason you won’t reach the gym is if something distracts you along the way, or if some catastrophe happens. In most cases, you won’t break your leg along the way, and the gym won’t suddenly disappear into a sink hole. Chances are, if you don’t reach the gym, it’s because ‘something else came up.’ If your goal is to get out of debt and to start accumulating wealth, then chances are you will achieve this, unless you get distracted and allow yourself to spend money unwisely. Following my common-sense plan will greatly increase your odds of success and help you reach your debt-free goals in record time.

The Law of Attraction states that what you focus on is what you create. Train your mind to focus on the results of your goals rather than on what’s not working in your life. Be sure to check your progress against your to-do list. Otherwise, your dreams will never manifest themselves into reality!

You have probably heard of the phrase, “Set SMART Goals,” where SMART stands for Specific, Measurable, Actionable, Realistic, and Timely. Let’s now apply that to your family’s financial goals and use it to really learn how to manage your money and pay off debt quickly. Sit down with your partner and write down your own SMART financial goals. If you’re single, it helps to do this with a close friend while both of you can work towards your individual goals together. An impartial coach will also give you extra accountability.

A SMART Goal is:

• Specific – Your goal must be well defined, such as “I will save $10,000 for my emergency fund in 5 years,” rather than something arbitrary such as, “I want to save more money.” Define a specific financial goal. Here are some examples:
  • Get out of credit card debt totaling $11,500 by December 2023.
  • Save $5,000 to pay for a second honeymoon in 2024.
  • Save an additional $500 per month for tuition to get masters degree by May 2025.

• Measurable – Your goal must be measurable so you can track your progress and so that you know when you’ve achieved it. For instance, say your goal is to have $5,000 saved in 2 years’ time. Work out the math so you know exactly what you need to earn or save per month.

• Actionable – This is how you outline the steps that will get you to your goal. If your goal is to save $5,000 in 2 years, then you know that you need to save $208 per month, every month, for 2 years. You could set up an automatic transfer from your checking account to your savings account. Perhaps you don’t have extra income, so the way you will save this is to cut $208 out of your budget each month and put that into your savings account. For instance, if you are paying for home phone and cell phone, cutting out one of these lines will save you money. We’ll cover ways to cut out expenses in future episodes.

• Realistic – It’s always important to set yourself up for success. This is why goals must be realistic in order to foster the feeling that you can do it. When you have accomplished smaller goals, you’ll find yourself even more motivated and excited to accomplish bigger goals. This is why knowing how to set a budget is important when it comes to achieving financial goals. Your budget will tell you what you can realistically save each month or how much more you can put toward your credit card bills. Perhaps once you establish your budget, you’ll realize you can actually put $220 per month into your savings account! Maybe your realistic number is only $150 and you’ll need to come up with other ways to save that additional $58 per month.

• Timely – Notice how each goal we outlined has a date or length of time attributed to it. Your money saving goal cannot just be, “I want to save $5,000.” It must have a deadline attached to it. Otherwise, you could just say to yourself, “I can’t save more this month, so I’ll just save next more month.” You’ll never reach your goal this way. It’s important to set goals for each of the following categories: short-term (6 months to 2 years), medium-term (up to 5 years) and long-term (10 years or more) goals. If your long-term goal is to own your own home, then your short-term goals will build the foundation for this long-term goal.