Setting financial goals is easy but meeting those goals can often be challenging. There are so many different places to put your money. It can be difficult to decide where to put forth the most effort. How should you split up your money between debt and savings? No matter what your financial goals are, deciding one definitive course of action and sticking to a budget are easy ways to help you make your financial dreams come true.

Establish a Goal

According to an ancient Chinese proverb, “The journey of a thousand miles begins with a single step.” Start with identifying your number one goal. Do you want to save money or pay off a credit card? When your finances feel overwhelming, choose one goal to prioritize. In doing this, you will be able to dedicate all your resources to this goal and accomplish it faster.

Stick to a Budget

It is important that you know exactly how much money you are making and spending each month. Set a budget for yourself and stick to it. Once you have that information, you’ll know the precise amount you will be able to save or put towards your debt. It is crucial information to have and it will allow you to estimate the completion of your goals.

Paying off Debt

If you have debt, paying it off is hopefully one of your top priorities. However, before you start working on it, make sure to save up a small nest egg for yourself. This will help cover any unexpected expenses that may pop up. After you have your nest egg, identify your smallest debt and focus all your resources towards that. Debt becomes much easier to tackle if you’re not splitting your money up. Develop tunnel vision towards your first goal and you will be able to pay off debt quickly. After you finish paying off your smallest debt, identify your ‘new’ smallest debt and go after that one.

Saving Money

If your goal is to save money, sticking to a budget is an amazing way to do so. After your budget is fine-tuned, identify areas in which you can cut back anything non-essential. For example, if you go to Starbucks 5 days a week for your coffee, consider cutting down to 3 days. You could also consider making your coffee at home. Every little bit helps to build your savings. If you are already saving everything you can, and it still isn’t enough, brainstorm ways you can earn extra money. If you need help with this, Jeff Proctor from compiled a list of over 100 ways to earn extra money. You can find that article here.

Don’t get discouraged. Debt can feel incredibly overwhelming and sometimes plans get derailed. Things will always pop up and that is okay. Give yourself a small amount of wiggle room. If you remain diligent and stick to a budget, you will be able to make your way towards financial freedom.

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