Everyone has a financial goal or two (or, in my case, five.) If you're anything like me, it's hard to focus on just one thing. Is it my emergency fund? What about catching up on retirement or even saving for a wedding? Luckily for both of us, one of the best things we can do is challenge ourselves to achieve ONE of our financial goals at one time.
Why should you challenge yourself?
Before we get into how we can challenge ourselves, let's first discuss why challenging yourself is so important. Here are some key reasons why:
Reshapes your goals
Challenging yourself in any aspect of your life is a way to see if the goals and intentions you have set for yourself are the right ones. We often set goals for ourselves based on what other people do and not what we want to do. Outside noise can influence what we tell ourselves, so instead of focusing on what we want, we focus on what others tell us we need.
Helps you prioritize
When you have multiple financial goals, it's hard to know what to focus on first. Should it be saving for a new car or retirement? Should you be stashing money away for a rainy day or investing? By becoming laser-focused on a challenge, you allow yourself to do just that. Focus.
Strengthens your self-confidence
Challenging yourself to achieve anything is a surefire way to build self-confidence. Once you learn a new skill, term, or accomplish a task you've put your mind to, no one can ever take that away from you. And now that you know you can do that, it's off to the next challenge.
12 Ways To Challenge Yourself
Now that you know why it's important to challenge yourself, let's get into just how you can do it!
1. Attempt to max out a retirement account
In a perfect world, we'd all be able to max out our retirement accounts to ensure we can be sipping drinks on a beach by the time you're ready to retire. The stark fact is that the average person only contributes 7% of their income. It may seem scary, but the more frightening part is that income isn't even taxed yet, which should allow you to save more. So why don't you?
In today's world, you have the option to contribute to both employer-sponsored and self-funded retirement plans. Figure out how much you are currently saving for retirement and if you are not maxing out, run the numbers to see how much additional you would need to keep.
Look for ways to free up any cash so you can start having more allotted. My favorite way to add additional money into my 401(k) is to add just 1% of my gross pay every six months. 1% of your income is a more manageable amount than even 5% and may seem less scary.
2. Go on a no-spend challenge
If you seem to be leaking money everywhere you go, a no-spend challenge sounds right up your alley. What's that? A no-spend challenge allows you to set rules around your spending in hopes of you cutting back on non-essentials. It's a great way to save money and enables you to have a good look at your overall financial habits. I have taken part in different no-spend and money challenges that were both strict and more relaxed, but both times they opened my eyes for the better.
3. Learn a new financial term
You don't have to be a CFP to know how to talk money, especially when it comes to your own! One way you can challenge yourself to achieve your financial goals is by learning new financial terms. Sure, there may be more straightforward terms to master, such as budget, diversification, or forbearance, but what's a glide path? Or top-down investing? You can check out more on this cool list.
4. Learn a skill you usually outsource
If you're like me, you are team "path of least resistance". I am a self-claimed lazy person, but in reality, I have a ton of anxiety and get overwhelmed by the tiniest things sometimes. It's this overwhelm that causes me to outsource instead of trying to learn a new skill, like hemming a pair of pants or trimming my cat's nails. Find a task that you usually outsource and challenge yourself to do it in-house.
5. Try a cash-only envelope budget
If you find yourself on a budget but not making any progress, I recommend trying a cash envelope budget. There are pros and cons to any budgeting system, but I love using cash. Even though I've been obsessed with personal finance for over ten years now, I still forget about expenses I have coming out and spend money I shouldn't. By allocating available funds into paper envelopes that I can see in front of me, I am now less likely to blow my budget and the financial goals I had riding on it.
6. Decorate your house on a budget
If one of your New Year resolutions is to tackle a "new you" project, try decorating a room in your house. A way to challenge yourself to achieve your financial goals could be setting a budget to decorate a unique space and sticking to it. Setting a budget turns it into a fun game and forces you to get creative with resources you already have to make your money go further.
7. Try minimalism
If decorating isn't your thing, why not try on minimalism? Living with less, or "minimalism," can be applied to all areas of your life, including your closet and finances. I love minimalism because it simplifies my life in general so that when my journey gets hard, I can keep going.
A few years ago, when I was undergoing thyroid cancer treatment, I relied heavily on minimalism. I was able to free up whatever energy I had for my doctor appointments and radiation treatments. If it sounds intimidating, I suggest trying out the 30 Day Minimalism Game.
8. Rewrite your money script
A "money script" is a belief, either true or false, that your brain has taught itself based on your circumstances or a situation you witness. Your money script influences your money mindset, and this happens at an early age. For example, suppose you had the unfortunate reoccurrence of having utilities turned off while growing up. In that case, you may automatically think utility bills are always high and money to pay them is scarce.
As an adult, we know both of these things are not necessarily true, but it can be hard to break that "money script." Being broke or having poor financial circumstances does not have to be our destiny. Challenge yourself to achieve your financial goals by speaking prosperity and abundance into your life instead.
9. Keep a consumerism journal
This is also known as a spending journal! Spending in alliance with your goals and values is hard if you don't know where your money is going. Try keeping a consumerism journal of all of your purchases for a month to see if you are putting those dollars where you want them to be. Make an entry for each day, along with the amount and products or services purchased. You can ask yourself if your spending is aligned with your overall goals, and if not, what could you be doing instead.
10. Utilize what you have
An old saying from the Great Depression that you may have heard your elders say is, "Use It Up, Wear It Out, Make Do, Or Go Without." While it may sound boring, they do have a point. How many times have you daydreamed after watching an advertisement only to go run out and purchase it? Even worse, how many times have you never thought about that item again once you've gotten it home? I'm guilty as charged right now, just by looking over at my vanity.
Challenge yourself to finish all the mascara you own before you buy a new one. Run in those sneakers until the soles are begging you to stop. Wear that little red dress you already own instead of a little black one. And go without that expensive perfume until you’ve met your 401(k) goal.
11. Find an hour a day to yourself
If having an extra hour in your day sounds glorious, it's because it is. Do you know what you can even do with an hour? Just thinking about having an extra hour a day to myself makes me giddy, and I don't even have kids!
Finding an extra hour to yourself a day helps achieve your financial goals and any other goals set for yourself. You could use that extra hour to get ahead on your finances by checking statements or starting a side hustle. You can work on your faith or workout. Maybe an hour of "you" time looks like coffee and a book. You can't pour from an empty cup. By taking time, even if it's just an hour, you'll be ready to jump back in to help whoever needs it. Having a daily routine can help.
12. Increase your income
My favorite saying of all time is "you can't save what you don't earn." I may or may not have yelled it at a professional dinner party about women and money, but guess what? It's true! Women, and especially women of color, traditionally make less than white caucasian men.
There have been many advancements made, but our paychecks still do not fully represent that. One of the most significant ways you can challenge yourself to achieve your financial goals is by increasing your income. You can take up a side hustle, build a business or negotiate to get that corner office you know you deserve. In case no one else tells you, earning more looks good on you.
Challenging yourself to achieve your financial goals doesn't have to be scary. It's all about setting intentions and take action. We'd love to cheer you on; Take one of our FREE courses and join our incredible community!