A new decade starts 11 days from today. What do you want to accomplish next year? Which dreams are most important to you?
The key to getting things done is to start planning today. Time waits for no one, and not a single one of us is promised tomorrow.
Sure, there are those rare instances where you fall ass-backwards into exactly what you want. Those instances are few and far between, so they don’t make for a good use of your time, energy, and focus. It’s better that you figure out what you want, then start planning today so that you can get it.
Maybe you’re like I was 5 years ago. At the time, I was sick and tired of being someone who had never been to Europe. It seemed like everyone I knew had been overseas and I’d somehow missed the memo. Know what I did? I created a sinking fund for my travels. I made it a goal to get over to Europe. In the past five years, I’ve been to Italy, Spain & Ireland.
It’s now a burr under my saddle that I haven’t seen the cherry blossoms in Japan. I’m going to start planning today on how to move this particular Bucket List item from the “Hope to Do One Day” column to the “Did It & Loved It” column.
- Goal? See the cherry blossoms in full bloom in Japan.
- When? Before 2025.
- How? Save money from every paycheque in my Travel Sinking Fund.
Sinking Funds are an Excellent Tool
Travel might not be your jam. It’s not for everyone – I get that. However, I’d be willing to bet dollars to donuts that there is something you’d like to have bought, seen, done, experienced by this time next year.
More likely than not, there’s a good chance that it’s going to cost you a bit of money.
Introducing…sinking funds! They’re a magnificent tool to help you fund your dreams, whatever those might be.
Imagine for a moment that you want to take a $500 cooking class next September. If you don’t have $500 kicking around with nothing better to do, then set up a sinking fund. This is going to be a savings account where you stash money every month until you have the $500 you need to pay for your class. There’s 8 months between now and the start of September, so you’ll need to stash away $62.50 per month. Or you can decide to stash away $100 per month for 5 months, or $250 for two months… I think you understand my meaning.
Once the sinking fund contains enough money for you to cash flow your particular goal, you can re-direct that monthly/bi-weekly/weekly savings amount towards something else.
There’s no limit to how many sinking funds you can have going at once. If you’re fortunate enough to have the extra disposable income, then you can fund more than one goal at a time.
What if you can’t think of something you really, really, really want? Well, in that case, you should still have a sinking fund that you’re filling with cash. You can call it your Dream Fund, or your When I Figure Out What I Really Want Fund. The point is to have the money in place so that you can cash flow whatever your heart eventually desires.
Automatic Payments are also an Excellent Tool
Maybe your goal for 2020 isn’t to buy anything. Perhaps you’re in debt and you simply want out.
If this is the case, sinking funds aren’t the tool for you. There’s no sense paying additional interest on your debt while money builds in a savings account. That’s a foolproof way of ensuring that you pay way more interest than necessary to your creditors. We definitely do not want that!
Let’s say that you want to pay down atleast $2500 against your debt. It doesn’t matter if it’s credit cards, a vehicle, student loans, whatever. I want you to set up an automatic payment that sends money directly to your debt every single month.
Pay attention to the following because this where the steak stars to sizzle. This automatic payment is over and above your minimum monthly payment. You’ll get out of debt way, way faster by making extra payments than you will by paying the minimum amount owed.
By paying the minimum amount owed, you’re guaranteeing that you’ll pay the maximum amount of interest to your creditors. If you can avoid doing that, then avoid doing that. Pay as little interest as you can to your creditors and keep your money for the things that make you happiest.
A New Year, A New Decade, A New You?
I’m never been one for New Year’s resolutions. To my mind, if a resolution is going to improve your life, then you should implement that resolution today. Waiting until some arbitrary date in the future always seemed counter-productive to me. Why keep doing less-than-optimal things in your life simply because of a date on the calendar?
That said, I know that many people imbue January 1 with a whole lot of importance. So I urge you to start planning today so that you improve your odds of making your dreams come true.