Your spending may reflect a lack of financial direction

One of the core principles of good financial management is aligning our spending with the things that we truly value. In order for that to be effective though, we need to have a good handle on exactly what it is we do value, and this requires some effort on our part.

Often, this process is called finding our “why”. What that means is that we’re really digging down to find the reasons behind the actions that we want to take. The reality is that committing to take action is one thing, but if we don’t really know the reason why we’re taking that action, it’s so much harder to keep on putting forth the effort to do what we know we need to do. Understanding “why” is the key to motivation.

When we have a clear and important reason to curtail our spending, pay down our debts and increase our savings, we’re much more likely to consistently follow through with these activities to reach our desired goal. Even in the face of the challenges that will inevitably arise.

Before you do anything else in regard to working on your personal finances, sit down and think deeply about what it is you really want out of your life. Talk about it. Define it. Identify why these things are important to you. And write them down.

Celebrate Smaller Victories Along The Way

The next step is personal goal setting; identifying the smaller steps that you can take on the way to achieving your primary goal. These smaller steps form the framework of your personal plan for meeting your objective. Achieving small goals along the way to your ultimate objective will give you a sense of accomplishment, and will motivate you to stay on track. It also gives you a clear way to measure the progress you are making.

One goal may be to set up an emergency fund so that you don’t have to go into debt if something unforeseen happens. Set goals to reach specific dollar amounts in those accounts and celebrate each time a threshold is achieved.

The important thing is that as you’re working toward these goals and making progress, you keep the ultimate goal clearly in mind. It’s important to always have a very clear picture of what it is you’re trying to accomplish and why, because that is what it will take to keep you motivated to stick with your personal plan.

Keep It Flexible

It’s also important to understand that your goals are not necessarily locked in stone from day one. As time goes by and you experience success, you may find that your goals change.

The key is that no matter how many times your objective changes, always keep it at the forefront of your mind. Allowing that overarching objective to motivate you, to be your “why”, is what will help to keep you on track, keep you disciplined, and keep you moving forward even when times are tough.