5 Levels of Personal Finance Commitment

5LevelsofCommitment
5LevelsofCommitment

Budgeting is a beginner's skill to achieving our personal finance goals. Budgeting is a necessary tool that helps us plan where we want our money to be spent, and allows us to evaluate our spending compared to our plan as the months and years go on.

It's a fantastic tool, and I can't imagine living without a budget. But, often times I think people give up on budgeting because it doesn't show immediate results. It's by no means a "get-rich-quick" process. It's a discipline that must be invested into with time and thinking power to ensure you're getting the most out of the budget.

There is no budgeting software that will answer the question you must answer before harnessing the power of budgeting in getting where you want to go.

How Bad Do You Want It?

What's your level of commitment to accomplish what you set out to do (fill in the blank with your financial goals)? Without a zeroed in target, we're likely to miss the mark every time.

Even with a goal and a pin-pointed target, there are a variety of ways to approach achieving your goals (tactics).

I call this your level of commitment. As you progress through the levels the tenacity becomes your throttle toward success.

Lower levels = slower results, higher levels = quicker results.

  1. I'll never get there.
  2. I'll get there when I get there.
  3. I'm willing to change, but still want to live my life.
  4. Tell me what to do and I'll do half.
  5. I'm all in. I'd cut off my right arm if it would help.

If I were to self-assess our financial journey I'd guess we are about a 4.3. Here's what we were willing to do while paying off out debt to achieve our goals.

This looks different for everyone, and every situation is different, but it's all relative to your inner ability to self-assess and push farther than you think you can go.

How We Committed Ourselves to Paying Off Debt

  1. Created and stuck to our budget
  2. Used our savings to pay off debts (Reduced our savings account to just $1,000)
  3. Cut Out Lifestyle (We said no to some things like eating out with friends, reduced our bloated food budget, cut our personal money in half and canceled cable)
  4. Took on second jobs
  5. Suspended 401K Contributions

I'm still amazed looking back at our journey to think that somehow we managed to average paying off $1,729.21 per month ($39,772.05 in 23 months). Not to mention, the first budget we did we were $600 in the hole for the month. Talk about a transformation!

The fact that we committed ourselves to the process and to sticking with our plan created an amazing sense of accomplishment for us. It boosted our confidence in ourselves and with each other (high fives feel better now).

What's your level of commitment? How do you plan on leveling up?

P.S. If you want some personal help setting up some goals and creating an action plan to achieve your goals, see if financial coaching is what you need.