Improving your personal finances is all about building momentum. Whether you’ve thought about it or not, momentum is what drives financial success.
Just like anything in life, taking the first steps are the hardest — whether it is paying off debt, building an emergency fund, or even starting to save for retirement. You start, and it feels like you’re getting nowhere . . .
The trick is building upon your momentum. For whatever reason, you got the courage to step up and do it. But you can’t give up after the first step. Here are some simple tricks to build momentum in personal finance, regardless of what your personal finance goal is.
Three Is the Magic Number for Lists
Studies have proven that three is the magic number when creating a to-do list of activities to get going. If you’re looking to build momentum, stick to no more than three activities to focus on.
This will help you keep your goals attainable, and not let you get burned out. A long list is daunting and impractical, and will make your money rather depressing.
For example, if you’re going to pay down debt, keep it simple:
- Create a budget template.
- Identify $50 you can commit to your debt.
- Make your debt payment.
Start small. Once you’ve mastered that routine, you can remake a new list with different items to help you get to your goals.
Establish a Solid Routine
Remember, you have to do something about 30 times before it becomes a habit. The trick is to establish a solid routine as quickly as possible, and correct your course if you mis-step.
Using the example above, you want to leverage your list to build your routine.
In the case of paying off debt, it can be making your debt payments on time each month. Maybe each month you go through your budget template, identify the amount you can pay, and then pay it. By doing this each month, you build a routine and positive momentum toward your goals.
The hardest part of building momentum is that you can’t always see the end of the path when you start walking. If you have $2,000 in debt, and you make your first $50 payment, $1,950 still feels like $2,000.
That is where milestones become so useful. Give yourself achievable goals, such as being at $1,900 after two months! That follows your routine, and gives you something solid to look forward to.
Every milestone can be different, but it is important to break down a big project into little goals so that you get physiological rewards along the way and continue to stay engaged.
Ride the Momentum to Success
Once you’ve gained a little momentum, you can let it work for you! Momentum is powerful, but you still need to hold up your end of the bargain.
Focus on the zen of budgeting and live without excuses. Have acceptance for what you’ve done and where you are going! Ride the momentum and achieve success!
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.