The Freedom 30: A Year-Long System For Financial Goal Achievement

It’s time to become a private investigator and examine every nook and cranny of your finances. Before you can establish a system for using your money to achieve your financial goals, you need to know where your money is currently going.

Start by downloading a monthly expense tracking worksheet. Next, fill out all the categories to the best of your ability. Try to be as accurate as possible. At this point, use your current expenditures and not your projected modifications. That part will come later.

This process is easiest if you use a debit or credit card for all or almost all your transactions. If you utilize this approach to spending, you can go online and see your digital record of where your money has gone. It helps to keep receipts for purchases at grocery or big box stores for a while so you can break down your costs into more specific categories.

If you use cash primarily, you’ll need to keep receipts and maintain a journal of your spending. It’s extra work, but it can be a huge benefit to your bottom line – freeing up funds to put toward your ambitions.

Be sure to keep in mind any bills that don’t come due each month, like annual memberships, insurance bills, or charitable contributions. Also, remember to include your debt payments on things like credit cards or personal loans.

Takeaway: By the end of this exercise, you should have the expenses part of your budget finalized.

For next week: Start compiling your income sources.

Using an income worksheet, capture how money comes into your various accounts. If you work, your income is probably at the forefront of your mind. However, don’t forget things like:

• Alimony
• Child support
• Investments
• Annuities
• Life insurance withdrawals
• Settlements
• Severance payments
• Side hustles
• Tips

Utilizing online banking can also make tracking a lot easier. Again, remember that not all transactions happen monthly, so if possible, try to look back at your income from the past year. If you share finances with someone like a spouse or partner, ask them to track down all their income sources as well.

It’s a good idea to avoid counting gifts or bonuses in this category because they aren’t guaranteed income. When you get these extra boosts, you can use them to either speed up the timeframe for achieving your goal or give yourself a little more security with an enhanced emergency savings account.

Typically, gathering figures for the incoming portion of your cashflow equation doesn’t take as long. If you still need more time to collect all the information on your expenses, feel free to dedicate some time in this session to finalizing your list.

Takeaway: A complete list of your income sources is your bounty from this week’s mini-project.

For next week: It’s about time to put all the numbers together, so start brainstorming ways to improve your cash flow situation, whether on the spending or income end.

Now’s the exciting part! It’s time to compile all the data you’ve assembled into a budget worksheet. Alternatively, you can use a computer spreadsheet or an app if that suits your needs better.

Be sure to list the current goals you developed as part of last month’s Freedom 30 sessions in your budget. Include them as regular monthly expenses to ensure they’re always accounted for in your plan. If you’re not 100% sure of the exact amounts just yet, you can use estimates of what you think you’d like to put toward each of your goals.

Now, subtract your current expenses from your present income. If the number is negative, aim to find ways to trim expenses or increase your income. If the number is positive, consider putting more money toward goals with the highest priority. Since cutting costs is typically easier than generating extra income, focus on this part of the equation first.

If you’re having trouble coming up with ideas for improving your incoming or managing expenses, speak to a financial coach.

With the money you’ve freed up from your new plan for more conscious spending, you’ve got an excellent new power source to inject into your goal attainment – whether paying off debt, upgrading your living situation, investing for your future, or something else.

Takeaway: You’ve now got a budget!

For next week: Get yourself psyched up to put your new plan to work for you.

While creating a budget is essential for managing your finances, it’s equally important to recognize that flexibility is key. Life is dynamic, and circumstances, priorities, and financial goals can change. Some things you thought would work, just don’t.

A more workable way to think of a budget is to view it as a set of guiding principles rather than strict rules – making the process more sustainable and less stressful. In essence, a budget should serve you – it’s a tool to help you achieve financial goals and maintain control over your finances.

A better way to think of a budget is as a set of guiding principles you will do your best to stick to, but that may need some massaging over time. If you beat yourself up over exceeding a budget in a particular month, your budget will quickly start feeling like more stress than it’s worth.

In the first month after you’ve put your new budget in place, there are two critical questions to be thinking about:

1. Do the changes you’ve made to your costs and income feel doable, and does your quality of life feel good with them in place?
2. Did the changes you made have the desired impact on your cash flow?

The first question is, of course, very subjective. That’s one only you – and possibly family members – can answer. If you cut something out, like going to the movie theatre once a month, that you now regret, feel free to reinstate that expense. Just know that you’ll need to adjust somewhere else to stick to your plan.

At the end of the first month of utilizing your new spending and saving plan, it’s time to do more math. Using a new budget worksheet, crunch your numbers from the past month. How closely were you able to stick to what you projected?

It’s important to stop here to remember that nothing about this is meant to make you feel inadequate about the choices you make with your money. If things didn’t work out quite the way you expected in the first month, it’s OK.

As Nelson Mandela said, “I never lose. I either win or learn.”, encapsulating the idea that every experience, including financial missteps, can be an opportunity for learning and growth. Remember what you did right and wrong in the months ahead and use them to motivate and help you make decisions more in line with your stated goals.

Takeaway: You can now move forward in life knowing that all the hard work you put into earning your money will more efficiently transfer into the life you’re dreaming of.

For next week: Start thinking about debt’s role in moving you closer to – or further away from – your financial goals.

Start with an easy one – and a fun one at that! Use this first half-hour to really think about what you want in life. Set aside for a moment what you’re “supposed to do” or what anyone else expects from you. This is just for you!

If you get stuck, consider starting with what your A+ life looks like in one year, five years, and in your retirement. Now’s the time to dream big – maybe you want to be debt free, buy a home, take on new hobbies, or travel regularly during retirement.

Ultimately, it’s up to you to decide what’ll create the most contentment in your life. Everything you do after this in the program was created to help you get those things.

Spend the first 15 minutes of your time this week envisioning your ultimate success in life. For the final 15 minutes, take those aspirations and put them into one of the following categories:

• Short-term goals (1 year or less)
  •  Mid-term goals (1 to 3 years)
  •  Long-term goals (More than three years)

It’s more than acceptable to have more than 1 goal in each category.

Takeaway: By the end of this week’s assignment, you should have a list of your goals and when you want to achieve them.

For next week: Start thinking about how you’ll get a firm grasp on the cost of each of your goals.

Now that your goals are in place, it’s time to find out how much it’ll cost. Collect relevant data to estimate the costs associated with each goal. For example, if saving for your child’s college expenses is a goal, research the expected costs of tuition, room and board, textbooks, etc.

Be sure to recognize the variables that may affect the final costs. For education expenses, factors like whether your child attends a private or public school, potential scholarships, financial aid, and their ability to contribute from a job all play a role.

Don’t worry about being perfect with your projection. At this point, all you need is a general idea of what’ll be required for each of your goals. Adjustments for each goal can be made as more information becomes available.

Your next step is calculating how much you’ll need to save each month to reach your goals. The simple version of this exercise is to divide the total amount you’ll need by the number of months until the anticipated achievement. Keep in mind that for goals with a longer timeframe, you may be able to harness the power of time to add a little interest or investment growth to the amount you’re setting aside.

Takeaway: Alongside your goals and timeframes, you should come out of this week’s efforts with a specific amount you want to save every month for each goal.

For next week: If you haven’t already, consider putting together a spreadsheet or written chart of your goals with several columns for filling out specific information for each objective.

Not all savings options are created equal. In fact, depending on the timeframe of your goals, you may want entirely different savings vehicles. Here are some common accounts you can stash your cash, grouped by goal timeframe.

Short-Term Goals

•  Savings account
  • Earn a small amount of dividends for the money you put into the account
• High-yield savings account
  • Earn a higher return than you would on a regular savings account, typically with some tradeoffs – like not having access to a physical location or limited withdrawals
•  Cash management account
  • Hybrid of checking and savings account with options for investing and earning at a higher rate than a regular savings account
•  Money market account
  • An account that offers higher variable rates for higher balances

Mid-Term Goals

•  Share Certificate
  • Earn a higher yield than a regular savings account by agreeing to leave your money in the account for a set amount of time

Long-Term Goals

•  Brokerage account
  • Account for investing your money in various stocks, bonds, mutual funds, or exchange-traded funds
•  401(k)
  • Tax-advantaged retirement account offered to you by your employer
•  Traditional Individual Retirement Account (IRA) or Roth IRA
  • Tax-advantaged retirement account that you control on your own

Takeaway: This week should conclude with you having chosen the type of savings accounts for each of your goals.

For next week: Reach out to your financial institution once you know which type of savings vehicle you’d like to utilize.

Achieving your financial goals involves planning, using beneficial resources, and taking action. Here are some tips to enhance your chances of successfully reaching your target amounts.

Start by prioritizing your goals based on urgency and importance. This not only helps determine where a bonus or unexpected windfall will be deposited, but also which accounts you feel more comfortable withholding funds from if you experience a loss in income or a sudden unexpected expense.

There will likely be times when you fall behind – if that’s the case, set a reminder for yourself to revisit where you’re at in 3 months and if you need to, make adjustments.

Frame your spending decisions in terms of whether it’s getting you closer to or farther away from what matters most to you. Doing so will hopefully keep you from making impulse purchases and only buying what you need, keeping you on track.

For a little extra help get a supportive, trusted person to share your goals with and talk to about your victories and setbacks to help remove any anxiety and keep you accountable.

Takeaway: When this week’s session is over, you should feel greater confidence in your ability to achieve true money mastery.

For next week: Start thinking about some of the unnecessary expenditures you think do the most damage to your goal attainment.