The most common piece of advice I read about overcoming any type of stagnating goals is just “to start.” So yes, you do need to start in order to fight financial stagnation. You also need to set up some financial goals. But you already knew that, and you’re still spinning your wheels. For whatever reason, you’re in the same place month after month, or very likely – you don’t even know what “place” you’re in because you don’t have the systems to track it.
How do I define financial stagnation? The inability to improve your financial position over an extended period of time. It’s living paycheck-to-paycheck without an end in sight. Or being so oblivious to your financial matters that you can’t remember where all your accounts are located, or the last time you tried to create a budget.
Here are five ways you can motivate yourself to take control of your financial future and begin moving in a positive direction:
1. Dedicate “Financial Time”
Many of you may not have the time to adequately tend to your financial life, besides paying ongoing bills and tending to “financial fires.” Sometimes even these fall through the cracks, and late fees and penalties result.
One of the best strategies for creating forward movement is to set aside dedicated weekly time to work on financial planning, and only financial planning. Forget about everything else, ignore the bills, filing, and tracking day-to-day transactions. Do nothing for a set amount of time but sit and think about where to go from here.
You may find that some days you will come up with absolutely nothing. That’s okay. Use part of your time to surf financial blogs and brush up on your knowledge of the basics, as well as current events. It may give you ideas about your own situation you had never considered.
2. Use a Tracking System with Comparison Features
Trying to operate your financial life without a system that can tell you where you are today, and how that compares to where you were yesterday, is like trying to steer a ship without a rudder or GPS (or at least a clear sky for the old-schoolers).
Start with a free system if you don’t currently have one, like Mint. Ensure that your system is able to provide you with easy to use graphical indicators of your progress, learn how to access those reports, and do so regularly.
3. Respect the Power of Gradual
It’s very easy to get frustrated and discouraged when the little things we do to improve our financial position seem like they aren’t amounting to anything. We live in a society that demands big results and wants them now. Several months ago, I read a wonderful post on Zen Habits that introduced the power of gradual.
The power of gradual speaks to the heart of becoming wealthy using sound financial principles. Most of us will not get rich overnight via a crazy idea we had in our sleep. It will come as a result of consistent, repetitive actions that seem like nothing on their own, but quickly add up to a whole lot of something.
4. Educate Yourself
If someone has ever said “You cannot do that which you do not know,” I give credit to them, otherwise the quote is mine! Educate yourself on investing, the best places to save your money, and creating or purchasing money-producing assets.. Read books like Rich Dad/Poor Dad which teach you how to look at your money from the asset-generation perspective.
Financial education empowers you to look at your own situation with a new perspective and enables you to “ask the right questions” where you may not have even known that questions existed. Enabling yourself with knowledge is the most powerful thing you can do for your money.
5. Set up a Graphical Motivator
Several weeks ago, I wrote about 5 ways to motivate your savings. One of my suggestions was to set up a simple graphical tool that would act as a motivator for your savings. This can take the form of a progress bar (a.k.a. “thermometer”), or a chart graphing your progress over the last year. But make sure that you’ve set up #2 on this list and have sufficient history to see accurate trends.
If you’re already using graphical motivators, don’t get discouraged when you see a negative month. None of us can be perfect month after month, and there are forces in your financial life that are simply out of your control. There will be months where you take a step back. Accept it. Know that if you take more steps forward then back, you will end up farther than when you started.
Have Your Own Method?
How do you fight financial stagnation? Share your methods in the comments.
4 thoughts on “5 Ways to Fight Financial Stagnation”
Constantly tracking my spending has been the biggest key for me to avoid financial stagnation.
Our turn around really didn’t start happening until that first month of tracking expenses! What a big slap in the face! Although, at times it is hard to keep up, being consistent in this area has been a big help!
Adam, thanks for stopping by! I keeping seeing you everywhere. 🙂
I had a similar experience when my wife and I started spending only cash for 3 months – it was eye opening to see how quickly we ran out of money and made us realize almost within days what we were over-spending on, and how far we needed to cut back. We’ve since gone back to the debit card for convenience, but have been able to stick to our budget with almost no problems.
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