Have you started thinking about your goals for 2025? If not, then you might want to take a few minutes and do so. I know that this time of year can be rather busy, but don’t forget that you’re important too. It’s okay for you to think about what you want.
There aren’t too many weeks left in 2024. Time for you to make a few high level plans so you can start funding some sinking funds. Celebrate a milestone birthday to celebrate? Travel to a favourite spot or some place new? Pursuing an educational pursuits? Attending your favourite artist’s concert? Meeting up with friends? Attending an artist’s retreat? Visiting an old friend or a distant relative? Contributing as much as you can to your retirement and investment accounts? Getting rid of your debt?
Whatever it is that you want to add to your life in 2025, now is the time to start sketching out how you’re going to pay for it. Money will disappear by being spent on crap you don’t care about if you’re not careful. Don’t let that happen! You work too hard to not have the money set aside to fund the things that you really, really want. Money is a tool that can help you to have the life you want. Use that tool wisely!
Step One – Automate
Use the power of automation for your benefit. It’s simple and highly effective.
In my opinion, the most important first step is set up an automatic transfer from your paycheque to an account that will fund your goals. These accounts are your sinking funds. Each one represents something that you want to accomplish Every time you get paid, a certain amount of money goes into your sinking funds. I don’t really care what the amount is – that’s up to you.
Start with what you can. Let’s say it’s $50 per paycheque. Fine, whatever. Increase that amount in 90 days. By following step 3 below, it won’t take you much longer than 90 days to figure out what expenses are getting you further away from your heart’s desire. As you eliminate those expenses, put the money to funding your goals. Challenge yourself to increase your sinking fund contribution by $25 every 90 days. If you can do more, great! And if you’re doing the max that you can, that’s great too!
As you eliminate expenses and pay down your debt, you’ll have more money to set aside to building the life you really want.
If one of your goals is to pay off your debt, then set up an automatic payment that sends a payment to your debt every time you get paid. So long as you’re paying the minimum amount every month, every other nickel will go straight to paying down your principal balance. Paying off debt automatically is a grand idea!
Step 2 – Prioritize
Most people will advise you to figure out what you really want before you start saving for it. Personally, I think this is a mistake.
Sometimes, it takes people years to figure out their heart’s desire. While they’re figuring it out, time is slipping away. It makes no sense to me to squander that time while setting priorities. Even if you currently don’t know what you want from your life, that shouldn’t be a reason not to set aside money. At some point, you will figure it out. Don’t you think that you’ll be happy to have the money already set aside to pursue your dreams when you finally know what they are?
Maybe you’ll wake up in 10 years knowing that you want to be a baker. You’ll need some money to tide you over while you get your business up and running. Or perhaps you’ll need to move to the other side of the world to satisfy your soul’s calling. They won’t let you on the plane on the strength of your smile. You might not know exactly what it is that you’ll want, but I’m here to tell you that it’s going to cost money. Start saving today, even if you don’t know exactly what you want.
While you’re busy figuring out what you want, you can have your money accumulating on the side. It’ll be there, waiting for you to give it direction. And if you have debt, then that money should be added to your minimum monthly payments so you can get rid of your debt as fast as possible. Life is better without the shackles of debt keeping you beholden to a creditor.
One of my lifelong dreams has been retirement. Along the way, I’ve fulfilled other dreams to travel and to renovate my home, to celebrate birthdays and milestones with family and friends. After all, no one has ever said that you can only have one dream. You can have as many as you want. The responsibility lies with you to pursue each of them every day, step-by-step until they become a reality.
Step 3 – Track Your Expenses.
That’s right. It’s the least-exciting step in the world. Everyone hates doing this, and I don’t blame them. I’m not terribly excited to record my purchases every day, but I do it anyway. In my not-so-humble opinion, tracking expenses is vitally important.
If you’re not tracking where your money is going, then how do you know if it’s being well-spent?
Blue Lobster, what do you mean by “well-spent”?
Easy. Every time you spend a dollar, you should never think of it as a waste. You should only part with your money when you’re convinced that doing so moves you closer to your dreams. Taking care of basic necessities is always a good expenditure of your money. When you have shelter and food in your belly, you’re not spending every waking minute thinking about survival. Knowing that you spend money on item-X when you’d rather be doing/tasting/experiencing/seeing your heart’s desire might make you more careful about how you spend what’s in your wallet.
Track your expenses. Assess every single one. Did that purchase get you closer to your dreams? Could you have not made the purchase, put the money towards your dream, and been just as happy? If the answer to the last question is “yes”, then don’t make that purchase in the future.
It’s Time For You to Pursue Your Dreams.
Each of us has dreams and hopes and desires that we want to see fulfilled. Never forget that time waits for no one. Your dreams are waiting for you to turn them into reality, so stop procrastinating.
Take the steps I’ve laid out and use them to design a life that will bring you the most joy. After all, isn’t that the very best use for your money?
