For many, the idea of saving money and paying off debt can be riddled with excuses and feel incredibly daunting. However, it doesn’t have to be a strenuous challenge. There are two straightforward and achievable methods to save money and eliminate debt.
Setting goals and maintaining a budget is a powerful duo. It’s essential to learn how to balance spending and saving, without becoming overly frugal. The most effective way to save money and exterminate debt is through the establishment of attainable goals. The key isn’t to exert more effort, but to plan smarter. Constructing intelligent goals will greatly support your financial strategy.
So, what constitutes a smart goal?
The S.M.A.R.T. acronym is a powerful tool when creating goals, as it stands for Specific, Measurable, Attainable, Realistic, and Time-Bound. These are the five crucial elements to not only goal setting but also devising an efficient budget.
So, how would a smart goal appear in terms of budgeting?
When revamping your budget, start by setting smaller but smarter objectives. For instance, you might want to decrease spending, pay off debts, and become debt-free. Although these are valuable and imperative goals, they aren’t specific enough. Instead, try making a smaller and more focused goal.
For example, specify a goal to reduce overall spending by 10%. Measure this by jotting down your current spending and observing the changes in a month’s time after implementing your goal. It can become attainable through the minimization of variable expenses such as groceries, dining out, and entertainment, making a 10% deduction in spending feasible. This is a reasonable and time-bound goal that can be achieved adequately over a month.
Smart goals can apply to all facets of life, from dieting, budgeting, to professional and personal objectives. For a successful budget, consistency with your smart goals is crucial, and continuing to set new goals is vital.
Then, once you’ve efficiently reduced your spending by 10%, set another goal to escalate your income. You can achieve this by obtaining a side job, starting a business venture, or working overtime at your present employment. To amplify the effectiveness of this goal, make it more detailed.
Designate an increase of income by 10% as your specific goal. It’s measurable comparing the income of this month to the last month’s income. It can be made attainable by considering options like taking on a side gig, freelancing, selling items you no longer need, working overtime, or launching an Etsy shop. This, too, is time-bound by giving yourself a few months to realize this goal.
In a matter of a few months following these smart goals, you could have successfully trimmed your expenses by 10% and bolstered your income by 10%, yielding an extra 20% cash flow to pay off debts and save money.
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