4 Steps to Financial Success When You’re Feeling Overwhelmed
When I first started learning about personal finance, I was so excited. It was as if a whole new world opened up to me. I felt like a kid in a sweet shop, but I had no idea what to focus on first.
I wanted to know how to get out of debt, but also build an emergency fund ASAP. And what about investing? That sounded super exciting, too!
There were so many ways to make my money grow: should I start by saving in high-interest bank accounts, or jump straight into stocks and shares?
If you’re anything like me, you’ll be standing in front of this veritable buffet of financial options, and have no idea where to go first. It can get really overwhelming!
But luckily, if you are interested in becoming more financially secure, there are a few general rules to keep in mind which will make it easier to get started.
Everyone’s situation is different, of course, but by following these four steps to financial success you will find it easier to avoid analysis paralysis.
4 Simple Steps to Financial Success
1. Start with ‘Focus’
I know it’s hard, but if you want to make progress, you have to commit to one financial goal at a time. The goal you choose will depend on your situation, but for most people, the recommendation is to start by creating a basic emergency fund, of perhaps £1,000.
This is to get you over the financial hump of unexpected costs, such as your car breaking down or your laptop dying, which might otherwise mess up your well-laid plans.
If you are struggling to reach your goals, committing to one specific goal at a time will help you to move forward.
2. Decide What Your Priorities Are
To know what makes most sense for you, you need to know your financial situation. What’s the most important thing for you?
Is your financial priority getting out of debt, having more spending money each month, or saving for a house deposit or other major purchase?
If you want financial security and stability, top up your emergency fund to cover six months of living costs (or more, if you want to feel even more secure).
If you dream of getting out of debt, target any spare cash at paying off loans, overdrafts, and credit cards.
Clearing your debt should be very high up on everyone’s list of priorities, but in certain situations — such as if it is in the form of a low-interest mortgage, or on a 0% interest credit card — it can make sense to prioritise something else.
If you dream of being debt free, target any spare cash at paying off loans, overdrafts, and credit cards.Click To Tweet3. Break Your Goal Down to Mini-Goals…
If you have a plan and think about your goal often, you are already half way there. We attract things that we concentrate our mind on for a long time.
You will achieve your goal, I have no doubt in it.
However, it is up to you to speed up this process. Desire alone will not bring you immediate and satisfying results unless combined with action!
Your goal must be important if you want to achieve it. But at the same time, it is hard to start working on a task that seems almost overwhelming and impossible to accomplish. That’s why it is crucial that you break your goal into the mini-steps.
This will not only let you track your success, but also make your goal seem easier to achieve.
- Mini-goals let you track your progress more efficiently.
- Mini-goals are not so overwhelming.
- Mini-goals are easier to achieve.
- Mini-goals let you feel the progress.
Ask yourself: “What steps do I need to take to achieve my goal?”
By answering this question, you will create a step-by-step plan, that is easy to follow. In the end you’ll find yourself making great progress towards your goals, which may look intimidating, or even impossible, by themselves.
4. Make A Plan
It’s easy to get carried away with all the possibilities, but know that the time will come for all the other exciting things you want to try.
For now, you need to focus on one thing at a time, and by doing so you will get to the next point on your list much faster. Your plan for getting out of debt and being more financially secure could look like this:
- Save an emergency fund of £1,000 by setting aside £X per month
- Pay off at least £X of debt per month/pay off all debt by [date]
- Start investing £X per month in a stock and shares, or in an ISA or pension
This is just an example, and your own situation and plans might look completely different. But the idea is that when you have a plan like this in place, you can figure out how long each step will take, and budget accordingly.
By following these four steps you will be well on your way towards the financial life you dream of, and can avoid slowing yourself down by getting side-tracked and taking de-tours along the way.
If you want to make progress, you have to commit to one financial goal at a timeClick To TweetAre you ready to achieve your money goals this YEAR!?
If you are ready to take action and achieve your financial goals, our Financial Success Planner is great place to start!
The planner will help you figure out what you really want to achieve with your money, define your long-term goals and break your big goals into monthly and weekly action plan so you can incorporate them into your daily activities.
Your Turn…
Ask yourself “What are my financial priorities?” and “What can I do to speed up my financial success today?
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I’m really bad with focusing, but good at prioritising, thank goodness for that 😉
Great tips – I think focus is really the keyword here otherwise it’s like drowning in a bottomless pit!
Very true! A skill many of us struggle with!
I’ve had such bad luck with shares over the years and with the way the pound is sinking I’m scared to do anything other than hide my money under my mattress. It terrifies me!
The pound is sinking, yes, but have you noticed the FTSE 100 is doing really well? 😉
focus is key here… it’s so easy to get carried away.. fantastic tips
It really is, and it takes work to stay focused!
Great post, love your tips. I am trying to be more focused at them minute but sometimes it is hard when you need things 🙂 I like to try and save for a rainy day though.
Thanks, I’m pleased you like them! And I know what you mean, I’m currently struggling with focusing on my financial goals instead of buying new running gear 😀
I always have a financial plan I review every 3 months. It keeps me focused.
Your third point is, in my experience, definitely the most important. A plan is vital, as it helps you to not lose sight of the bigger picture. For all goals I want to achieve, I write down a list of smaller tasks and deadlines on a post-it note, and stick it to my notice board above my PC. I find this really helps – especially with motivation!
Great tip Trevor, it definitely makes a difference when you break it up!
I love this post. Some really great tips. It’s actually so easy to have financial success if you focus and plan. Last year I always thought I ‘didn’t’ have any money and always felt like I was living wage to wage. Then I changed the way I saw the money I had coming in and what I did with it. I aimed to save £100 a month (which is only £25 a week). By cutting out a few things I could do that and pretty soon I fell in love with that feeling and started saving £50 a week (it’s amazing how much you can save by cutting out take out coffee, and the little things you get in the week) x
Chloe, thank you for taking the time to leave your comments and for sharing your insight with us. Focus is truly the key to financial success it holds all our plans together.
Well done Chloe, that’s fantastic! When you realise that you *can* change your financial situation and just start small, there’s no limit to what you can achieve over time!
Some great tips there, I think I need to try focusing on just 1 thing at a time, I’m always trying many at once and like you said it’s overwhelming xx
I definitely get that, I want to try everything right now this very moment 😉 So it does take work, but it’s the best way forward!