Happy New Year and Welcome to the Frugal Fresh Start Challenge! Are you ready to make 2020 your year of financial success?!
We are so excited to help you make new frugal habits, lower your expenses, and get your finances in order. Just meet us here (or over on YouTube) every weekday from January 1st through February 7th for a fresh post and brand new video. Each day will include a valuable financial lesson with an actionable challenge that will set you up for successfully reaching your goals.
Right now you can download to workbook for free when you sign up for the challenge. The workbook will help you keep track of what you are learning and follow through with your commitments. You’ll receive it in your email when you sign up. Go print it out in good ol’ black and white (definitely the frugal way to go) and set yourself up for success!
The challenge is based on the book Frugal Fresh Start. You can grab your own copy to follow along with the challenge. You can get the PDF version of the book for just $4.50 with the code NEWYEAR.
Why do you want to be more frugal?
To get started, let’s think about YOUR reason to make a frugal fresh start. It’s probably not just for the fun of it, or to get attention from your friends. Maybe you want to pay off those credit cards once and for all. Maybe you want to save for a house. Maybe your retirement accounts are slimmer than you’d like. Maybe you just have a spending problem. Who couldn’t use a little more cash in their pockets?
Let’s turn your reason for wanting to spend less, into a goal.
I love this metaphor from Earl Nightingale.
“People with goals succeed because they know where they’re going. It’s that simple. Failures, on the other hand, believe that their lives are shaped by circumstances … by things that happen to them … by exterior forces.
Think of a ship with the complete voyage mapped out and planned. The captain and crew know exactly where the ship is going and how long it will take–it has a definite goal. And 9,999 times out of 10,000, it will get there.
Now let’s take another ship, just like the first, only let’s not put a crew on it, or a captain at the helm. Let’s give it no aiming point, no goal, and no destination. We just start the engines and let it go. I think you’ll agree that if it gets out of the harbor at all, it will either sink or wind up on some deserted beach–a derelict. It can’t go anyplace because it has no destination and no guidance.”
It’s very hard to succeed unless you know what you’re trying to succeed at. If you’re not trying to reach a defined destination, your end point will be determined by a series of uncoordinated decisions made each time you find yourself under pressure. Your goal is your destination. It’s where you want to end up. It keeps you from simply wandering.
A goal does three things for you:
1. It gives you a direction and helps you focus your efforts to make sure you’re heading in that direction.
2. It acts as a finish line, a destination that you look to for motivation when things get hard.
3. It allows you to measure and celebrate your progress.
Make your goal a SMART goal
Have you seen the acrostic for SMART goals? There are several variations, but they all have the same general idea.
For setting a financial goal like the one we’re about to set, Specific, Measurable, and Time bound are the most important elements. In almost all cases, that means your goal will involve a number. That will make your goal both specific and measurable. If your goal is not quantifiable, you won’t be able to tell if you’re making progress, and at the end of six months, you won’t know if you succeeded!
In contrast, goals that say “more” or “less” (i.e. “I’m going to eat or less” or “I’m going to eat at home more”) are not specific enough and are hard to adequately measure.
In today’s video, Mike walks through some examples of setting a goal using this framwork.
Setting your own financial goal
For our Frugal Fresh Start Challenge, we will all set a goal for 6 months down the road. If you’re starting on January 1st, then your end date will be June 30th.
What sort of a goal? That depends on you! Think of YOUR reason for wanting a frugal fresh start and you may find that you have a goal already, or at least the beginnings of one. To get your mind moving, here is a non-comprehensive list of examples that could be a goal or part of a goal, in no particular order:
- Save a certain amount of money for a certain purpose (new car, vacation, down payment, retirement).
- Quit spending on certain items altogether.
- Constrain spending in certain categories in a measurable way.
- Pay off a certain credit card balance.
- Pay off a car, a student loan or some other debt.
- Add a certain amount to an emergency fund.
- Make three extra mortgage payments.
For more ideas, see the comments on this post, many of which were from when we originally hosted this challenge back in 2015. (We’ve totally updated the post, but left the comments because they’re so inspiring!)
Don’t get so caught up in the right number for your goal right now, especially if being actively involved in your finances is new for you. The actual number may need adjusting after you begin, but having some number is important. The most important part is to set a goal that will motivate you and give you a reason to be more frugal. A good goal will help you realize that the sacrifices you are making and the new habits you are cultivating will be worth it.
Set a financial goal for 6 months from now that gives you a reason to be more frugal.
Write your goal down in your workbook. If you don’t have the workbook yet, you can get it emailed to you when you join the challenge. We would love for you to share your goal in the comments so we can all encourage one another!