This post is part of a series on money related goals that are common personal finance resolutionsas we kick off a new year in 2010.

In preparing for battle I have always found that plans are useless, but planning is indispensable. -Dwight D. Eisenhower.

I’ve used this quote in a post before, but it is a really good one regarding the importance of planning.

Eliminating debt is like fighting a battle in a way.

Debt is the enemy and you have to eliminate it.

It is not always easy, but by careful planning, you can increase the odds that you will be successful. It is not the plan itself, but the act of planning that will allow you to achieve your goal of being debt free.

You can write down the best plan in the world, but if you never look at it again, it is useless. If circumstances changes and you do not go through the act of planning again, your original plan will also be useless.

Your debt is not going to go away by itself- there is no magic “debt fairy”, regardless of what some companies advertise on TV, that will sneak in your house in the middle of the night, and  magically  pay off or eliminate your credit card debt, or any other debt, for that matter.

A Simple Way to Plan Out Debt Reduction

Figure out how much you owe and create a list of debts

List out all of your debts, including balances, interest rates, and monthly minimum payments. Then, order them by the highest interest rate first (what pf blogger Flexo at Consumerism Commentary calls the debt avalanche method), or by lowest balance first (Dave Ramsey’s debt snowball plan).

Math will tell you that paying off the highest interest rate debt first will save you the most money (debt avalanche). For some, though, paying off and eliminating the smallest debt first (ala debt snowball) will provide an emotional boost to keep you going as you eliminate debts one-by-one.

In the end, it doesn’t matter which method you use, as long as you plan it out and stick to it!

Find a way, any way (legal, of course), to pay more than the minimum on the debt on the top of your list.

To pay off your debt as quick as possible,you may need to both:

1.) Make more money,  and

2.) Cut back on expenses to free up cash to pay towards the No. 1 debt on your list.

Use frugal living and money saving tips to make this extra payment as big as possible.

After you have the No. 1 debt on the list wiped out, you take what you were paying on that one and move that payment over to debt No. 2 (which is now debt No. 1 on your list), increasing the payment you were previously making on that debt.

Repeat until complete!

The trick is to keep at it, and review and update your plan of attack regularly, at least monthly, but preferably much more often, and when you get a debt paid off. Tracking it on a spreadsheet will make it a little easier, but a pen and paper would work out fine too.

Plan your attack on debt starting today!

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• Tweaking the Debt Snowball to Fit Your Life
• Creating an Aggressive Credit Card Debt Elimination Plan
• Debt Reduction or Debt Elimination- Do the Words You Use Make A Difference?
• Going from Debt to Wealth- A Closer Look at Dave Ramsey’s 7 Baby Steps Plan
• Making Your Hard Earned Dollars Work Harder For You

Sure it’s after January 1st, but I’ve never been a big fan of starting any of my own resolutions on January 1st anyway- I guess I think it is to clichéd, or more than likely it is too much pressure for me and I have never been that successful when I tried to start one on January 1st. Either way, I usually prefer to start them a week or so later.

While it is probably most common to lose weight, exercise, eat healthier, etc., money related resolutions are pretty common as well. On the usa.gov web page on popular New Year’s resolutions , “manage debt” and “save money” are at the top of the list.

My guess at what the top five money or personal finance related resolutions would be as follows, not necessarily in any order though:

Reduce and eliminate debt- Debt, especially credit card debt, can hang over your head, and really stress you out if you don’t have a desire and plan to stop incurring new debt.

Create and Stick to a Budget- Some people don’t really need a budget and get along just fine without one, others are a complete train wreck financially if they don’t follow a budget strictly. I guess I am somewhere in the middle, but being honest, I run into a lot more issues when I don’t follow my budget very carefully.

Spend less money- Spending less money goes hand-in hand with living on a budget, but the two are not necessarily tied together all of the time. You can budget spending, and still spend too much.

Make more money- Who doesn’t want to make more money? While many people are satisfied with what they make, I would guess that most wouldn’t mind making more.

Invest more, especially for retirement- As I hit my mid thirties (OK, mid to late 30’s), I know I have started thinking about retirement a lot more. Am I saving enough? How much do I need to save? These are common questions, and the answers can vary widely.

These money related resolutions are great ideas, but implementing a plan to stick with them over time is the key to being successful.

Over the next couple of weeks, I am going to address each of these 5 personal finance “resolutions” in more detail, starting with reducing and eliminating debt.

Have you made any of the money related resolutions above?

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• Tips for Making Your Personal Finance Resolutions Stick- Turn Your Resolutions into Habits

Besides losing weight, getting your finances into shape is probably one of the most popular New Year’s Resolutions every year. But as with other resolutions, it is can be a pretty nebulous goal unless specifically defined.

Saying you want to make a change or do something is not the same as actually doing it. To make a resolution stick, you have to change the habits that got you to where you are. Just as overeating and a lack of exercise can contribute to your being overweight, not practicing good money habits can lead to financial problems or disaster.

Also, like the losing weight example, if you have a defined goal in mind, like lose 20 pounds, you are more likely to try to achieve that goal and stick to it. With your finances, a goal such as “pay off $10,000 credit card debt” is much more specific and actionable than just “reduce my debt”.

Make your resolutions specific goals

Instead of “save more money”, I will save $200 per month for a total of $2400 in 2009.

Instead of “reducing my debt” I will pay off an extra $50 per month above my minimum payments.

Instead of “paying off the car loan”, I will pay an extra $100 per month till the car is paid off.

And so on. Giving yourself specific goals, that you can take action with on a regular basis, can help you turn resolutions into habits.

Making your resolutions habits

Once you have a specific goal in mind, you can make that goal a habit. Where are you going to get that $100 a month to add to your regular car payment? Well, you could trim your expenses, by $100 a month, or earn more income. Breaking it down even further, it would be $25 a week, or $5 per weekday. Could you cut back on eating out at lunch and bring your lunch to work or cook at home more often so you don’t have to eat out? Could you work a few hours of overtime per week, or start a side business? Taking regular action (habits), and making the correct choices on a daily basis can help you reach your goal.

Tips for sticking with your newly developed habits:

Don’t over do it- Keep your goals reasonable. Trying to lose 50 lbs in a month, or pay off $5000 in two weeks might be a little to lofty.

Start small- Even a few minutes a day, or a few dollars a day can help you reach your goals.

Tell others- Let other people know what you are trying to do and why.

Track your progress- Keep track of how you are doing, and make adjustments if necessary.

Acknowledge your success-Reward yourself!- If you meet your monthly goals, reward yourself-just don’t over do it.

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• Are Your Sticking to Your 2008 Personal Finance Resolutions?-Review Your Progress and Get Back on Track Today!
• Developing A Burning Desire to Improve Your Finances-Part II-Key Traits of Success
• 5 Common Money Related Resolutions that Can Help Your Finances in 2010
• 10 Ways To Develop a Saving Habit
• Use Extreme Measures to Eliminate Your Debt or Increase Savings

Getting out of debt is not rocket science, but it usually is harder than getting in to debt. In order to get out of debt, whether it is credit card debt, unpaid bills, or any other debt, you need to do 3 basic things:

• Stop incurring new debt
• Focus on spending less and making more money-both of which increase the cash you will have to pay off debt
• Pay off your debt-as quickly as possible

While these 3 points are the basic principles of getting out of debt, the following are 10 simple but effective steps you can follow to get yourself out of debt and on the road to building wealth.

1.) Assess your situation- Add up all of your debts and figure out what the “damage” is. Unless you know the extent of your problem, you are much more likely to simple ignore it, month after month. Whether it is $500, $5000, or $50,000, you need to know how much it is, and to eliminate it you will have to pay it off one dollar at a time. You need to know what your goal is in order to achieve it.

2.) Figure out where your spending problems are- If you have problem areas, you need to identify them. Spending too much on eating out at lunch everyday? Do you have a clothes “habit”? Identifying your problem areas is an important part of debt reduction. You need to know where your money is going.

3.) Stop spending in those problem areas- Cut back on your problem areas first, and you will stop incurring new debt and increase your available cash.

4.) Trim other expenses-Cutting back spending in other areas can help as well. Do you have a gym membership you don’t use? 300 cable channels you never watch? Cutting back in different areas can decrease your regular expenses.

5.) Figure out how to increase cash flow- which you will them apply to your debt reduction payments. Can you work overtime at your regular job? Sell items on eBay? Moonlight on the weekends? Increasing your cash flow can be a tremendous boost to your debt payments.

6.) Follow a proven debt reduction strategy- Whether or not you agree with Dave Ramsey’s math, the debt snowball is a debt reduction strategy that works. If you don’t like his method, follow it but pay off the highest interest card first.

7.) Get everyone onboard- No man is an island, and if you and your significant other are not on the same page when it comes to your finances and debt reduction, it will be many times harder. Communication with your partner is much more pleasant than fighting or arguing about money anyway.

8.) Commit to sticking with your plan- Figure out what your motivation is, your dreams, and what you want out of life. Develop a burning desire to get out of debt to enable yourself to achieve those dreams.

9.) Write down your plan- Coming up with a plan is one thing, but sticking to it is more difficult. By writing down your plan, sharing it with your spouse, and reviewing it on a regular basis, you will increase your chances of success many times over.

10.) Track your progress- Keeping track of your progress allows you to celebrate minor victories, and see when you’re getting off track. An excel chart can be fine, or join the No Credit Needed Network to track your progress and share it with other like-minded individuals.

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• Are Your Sticking to Your 2008 Personal Finance Resolutions?-Review Your Progress and Get Back on Track Today!
• Basic Money Management- Creating and Living on a Budget
• Creating a Household Budget and Why it is Important
• Use Extreme Measures to Eliminate Your Debt or Increase Savings
• Tips for Making Your Personal Finance Resolutions Stick- Turn Your Resolutions into Habits

My 4 year old son started Pre-K yesterday. 14 more years, and he’ll be heading off to college, if I have anything to say about it. While I am not 100% convinced that parents should pay for all of their kids college expenses (that’s an entirely different discussion) I have been looking into the different options available for saving for college expenses.

Education Savings Accounts (ESAs)

-An education savings account or Coverdell education savings account, formerly known as an education IRA, is a tax-deferred savings or investment account that can be used for qualified education expenses (tuition, books, uniforms, etc.) at elementary or secondary schools, or college. ESAs allow a person to invest up to $2000 per year per beneficiary (child) in after-tax contributions, which can grow tax-deferred, and withdrawals used for qualified expenses are tax-free.

529 Savings Plans

- A 529 plan, named after the section of the IRS code, is funded with after-tax contributions as well, and also grows tax-free if the money is used for qualified higher education (college) expenses. 529 plans are offered through individual states, but a state’s plan can be used by a resident of that state to attend any accredited college. Also, many states allow non-residents to open accounts. It is a good idea to check your state’s plan first, however, as some states (including Louisiana) provide state tax deductions by residents for contributions and/or matching contributions. Louisiana, for example, matches between 2% and 12% depending on your income, and you are allowed to deduct from your state income up to $2400 per year for individuals or $4800 for married filing jointly. Excess can be carried over as well.

Differences between a 529 and an ESA:

An ESA can be used for elementary, secondary (high school), or college tuition or qualified expenses. 529 plans can only be used for college.

ESAs are subject to income limits (phase out starts at $95k for individuals and $190k for married filing jointly). 529’s do not have income limits, or yearly contribution limits, but are subject to a max. lifetime contribution. (although many state limits are $200k +)

ESAs can be invested in a variety of investments (stocks, bonds, etc.) while 529 plans are limited to what the individual state has to offer, although most offer a variety of mutual funds.

Additional Resources:

IRS information on ESAs

529 Plan information- Collegesavings.org

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My friend PT over at Prime Time Money was kind enough to tag me with the “Single Step Personal Finance Challenge” created by Mrs. Micah. I have recently built up an emergency fund, and my next personal finance goal was to eliminate all of my credit card debt. But to be honest, I have slacking a bit over the last couple of months, and, although I have been paying a little more than the minimum , and my CC debt has decreased, I have not set up a detailed plan to reach my goal of eliminating my credit card debt.

So thanks to PT and Mrs. Micah, my single step personal finance challenge will be to work on an detailed, aggressive credit card debt reduction elimination plan. I want to lay out a plan for how I am going to eliminate this debt, and when I will have it gone. I plan on an aggressive reduction plan, and will set up at least monthly goals, if not bi-weekly or weekly. I am going to work on this over the weekend, and will share it with you early next week.

I am going to tag Andy at Saving To Invest, Pete at Bible Money Matters, and Ashley at Wide Open Wallet to see if they want to play along. Anyone else who wants to take a “Single Step”, let me know with a description or link in the comments!

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• Creating an Aggressive Credit Card Debt Elimination Plan
• Debt Reduction or Debt Elimination- Do the Words You Use Make A Difference?
• Use Extreme Measures to Eliminate Your Debt or Increase Savings
• Use Planning to Reduce and Eliminate Your Debt
• Are Your Sticking to Your 2008 Personal Finance Resolutions?-Review Your Progress and Get Back on Track Today!

I am not really sure if we are in a recession, at least according to the standard or “official” government definition. But I do know that gas and groceries have been getting more expensive, the stock market has been declining and is quite volatile, banks have failed, and the general sentiment of the nation’s economy is rather gloomy. However, now is not the time to panic and take your money out of the bank and stuff it under your mattress, or stop investing in your 401k. However, making safe and smart moves with your money and your spending habits can provide you with a sense of security about your finances and future. When you feel more secure, it is easier to focus on reaching your financial goals instead of getting distracted by the bad financial news and “noise” out there.

7 Safe Money Moves for Unstable Economic Times

Don’t get scared or panic about your long term investments- Your long term investments should be just that, long term. Don’t look at the last week, month, year, or even five years if you are 25, 30 or more years from retirement. Even if you are planning on retiring in 10 years, pulling your money out of stocks or even worse, stopping retirement contributions is probably not the smart thing to do. Realize that the fluctuations in the stock market over 6 months or even a year is short term compared to a 10, 25 or 40 year retirement horizon. Making a change based on a few months is very short-sighted thinking when you compare it to your retirement horizon.

Look for additional sources of income- Can you boost your income by working more, getting a part-time job, or probably the best option, starting a small or part-time business? It never hurts to add to your “skill set” by starting a small business, doing side-work, or moonlighting.

Avoid, reduce, and eliminate consumer debt- Now is a great time to make a dent in or even better to eliminate any consumer debt you may be carrying, especially credit card debt. The less money you owe others, the less liability you will have should you lose your job or have another financial emergency.

Adopt frugal habits- Just like a business does when sales are slow, “tightening up” or making cuts to the non-essential expenses is a good thing to do during uncertain times. Developing a frugal mindset can help you apply new, frugal habits to many facets of your life. Spending Less $ = Saving More $ = Good Idea

Boost your emergency fund- In times of economic uncertainty, cash is certainly king. Boosting your emergency fund is a good idea and allows you to have some flexibility in the future. Make sure you have it in a high yield savings account, to at least counter the effects of inflation somewhat. ING Direct (Get $25 free for opening an account) is one of many good online banks with a higher interest rate than a local bank savings account.

Delay any sizable purchases-Were you thinking about purchasing a new car in the near future, or some other sizable purchase? Delaying your purchase for a while can allow you to increase your savings till you feel a little more comfortable with the current state of the economy.

Plan for your future- Now is a great time to examine your retirement and other personal finance goals. If you are making strides towards your goals when times are tough, it should be that much easier when things are more certain and the economy has a more promising outlook.

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• I Can’t Predict the Future
• Defining and Investing for Short, Medium, and Long Term Personal Finance Goals
• Details of Obama’s Proposal for a Second Stimulus Package
• 10 Ways To Develop a Saving Habit
• Ways to Deal With Financially Stressful Times

Part of developing a strong or burning desire to improve your finances, as I discussed yesterday, involves determining your motivation for achieving your financial goals. Another part of the equation in achieving your financial goals is employing key principles or traits for achieving these goals. Taking well known keys of success and applying them to your finances can help you achieve your goals. By implementing them, they can become regular habits and help you keep your desire to achieve the financial life you want very strong.

Key Traits for Achieving Your Financial Goals

Belief- Do you believe that you can achieve the financial situation that you want? The lack of belief can be very limiting to our behavior. If you don’t believe you can do something, it is likely you will put very little effort into it, and you may not even try. If you do not believe you can swim across a river or stream, would you even jump in the water?
Persistence- Being persistent in achieving goals means being repetitive with your actions. Making smart money decisions on a daily basis, paying off debt on a regular basis, and investing through ups and downs in the stock market are all examples of being persistent with taking positive steps to improve your finances.

Taking Action-You can wish for something all you want, but it takes action to actually achieve a goal. Just wanting to be financially independent is not enough. You must take positive steps in the right direction to arrive at your destination.

Visualization- Do you have a clear picture of what your goals look like? Whether it is a $0 credit card balance, seeing you child graduate from college, or a retirement home on a lake, visualizing these goals on a regular basis can keep them fresh in your mind and give you a clear picture of the goal you are trying to achieve.

Self-Discipline- Doing those things you know will improve your personal finances, even when you’d rather be watching TV, hanging out with friends, or doing something else takes self-discipline. Forcing yourself to focus on your financial situation, and seeing the results, will help increase your desire.

Refusal to Give Up- Don’t let setbacks or failures in achieving your goals cause you to quit or give up. The fact that you raided your emergency fund for $1k for car repairs will make little difference on whether you achieve your goal for 20 years from now, as long as you continue along the right path when it comes to your finances. Once you quit, you will never achieve your goals.

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• Developing A Burning Desire to Improve Your Finances-Part I- Motivation
• Tips for Making Your Personal Finance Resolutions Stick- Turn Your Resolutions into Habits
• Are Your Sticking to Your 2008 Personal Finance Resolutions?-Review Your Progress and Get Back on Track Today!
• 10 Great Ways For College Graduates to Start Off on the Right Track with Their Finances
• Independence Day, Financial Freedom, and Being Thankful for What You Have

It would be great if, once we realized that our finances were out of whack, we could flip a switch and change all of our bad spending habits, instantly pay off debt, and start accumulating wealth. Unfortunately, money, as well as life, does not work this way. Bad habits are hard to break, paying off large amounts of debt can be akin to an endurance sport, and reaching financial independence can take the better part of a lifetime. In this day and age, with instant access to resources via the computer and friends and family via email, text messaging, and cell phones, sticking it out for the long haul can be difficult. Motivating yourself to spend wisely and pay off debt can be hard as well. Developing a strong or burning desire can become necessary to make smart money decisions over long periods of time. Determining your motivation for achieving your financial goals is very important, as well as employing key principles of success to achieve your financial goals. Below are several sources of motivation you can use to help develop a burning desire to improve your financial situation, whether it be spending wisely, eliminating debt, or planning for financial freedom. Tomorrow I will discuss key traits for achieving financial success.

Sources of Motivation for Achieving Financial Goals

Self- The person you will be tomorrow when you wake up is influenced in part by your actions today. Similarly, the financial decisions you make today will influence your financial situation tomorrow. By defining the financial situation you want in the future clearly, you can remind yourself when making money decisions that the choices you make today will shape the situation you are in tomorrow. Where do you want to be financially in 5, 10, 25, or 50 years? Do you want to still be struggling, or do you want to be financially independent? Do you have clear ideas and goals? The future starts now. Are you satisfied with where you are financially now?

Family- Your wife, children, other family, or even friends can be a powerful motivation tool for achieving financial success. Who depends on you to take care of them? Even if you are not married, will someone depend on you in the future? Do you want to be able to pay for your children’s college education? Who will take care of the people that depend on you if you were no longer there? Should something happen to me, I would want my family to be comfortable, and my wife to be able to take care of the kids. Since my wife is a SAHM, and I am currently the only one earning income, that could be difficult if I do not get my finances in order.

Helping others- Living in a city that was devastated by a hurricane and flooding, I have become much more empathetic towards the problems of others. When a see an elderly man or woman struggling to rebuild their house nearly 3 years after hurricane Katrina, I wish there was something I could do to help them. Due to my current financial situation, I am not able to do very much in the way of donating money. I would like that to change in the future. Are there times you wish you could help someone financially, but are unable to?

Check back in tomorrow for Part 2, Key Traits for Achieving Your Financial Goals.

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• Developing A Burning Desire to Improve Your Finances-Part II-Key Traits of Success
• Are Your Sticking to Your 2008 Personal Finance Resolutions?-Review Your Progress and Get Back on Track Today!
• Spending and Your Feelings-How to Avoid Letting “Feeling Depressed” Adversely Affect Your Personal Finances
• Don’t Wait on Someone Else or Some Future Event to Fix Your Finances
• My Personal Finance Tipping Point or When I Decided to Change My Financial Future

Happy Fourth of July to everyone, a day to relax, spend time with family and friends, hopefully get outside and maybe even do a little grilling. But the 4th of July is also a remembrance of the day the United State declared their independence from British rule. I have also being thinking about my own financial independence, and how I should be thankful for what I have, as have some others around the PF blog community.

….

Declaring Financial Independence

Patrick over at Cash Money Life has declared July 4th Financial Independence Day. In order to achieve financial independence, you must make a conscious decision and then take action to achieve that goal. Have you decided you want to be financially independent? Making the decision is the first step towards reaching that goal. You then need to plan out how you will achieve it, and take action on those plans.

Being Thankful for What You Have

Even as I struggle to get out of debt, I am thankful for what I do have. I make a good income, have a good job, and a wonderful family. I have the ability, in this great country, to earn an income, get out of debt, and become wealthy. As bad as the economy seems to many, with high food and gas prices, if you notice these things it means you have a car and are buying food. There are many people in the world that make even the poor people in America look pretty well off. Pete at Bible Money Matters recently asked the question “How Rich Are You?”, and pointed out that if you make $48k a year, you are in the top 1% in wealth according to income. It really makes me appreciate what we do have here in the U.S. Just the opportunity to achieve your goals is much more than is available in many parts of the world.

Have a safe and Happy 4th!

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• Developing A Burning Desire to Improve Your Finances-Part II-Key Traits of Success
• Weekend Roundup-Independence Day Edition
• Tips for Making Your Personal Finance Resolutions Stick- Turn Your Resolutions into Habits
• Developing A Burning Desire to Improve Your Finances-Part I- Motivation
• Debt Reduction or Debt Elimination- Do the Words You Use Make A Difference?

Some goals are easy to define. Others are not so easy. After a bit of thought and number crunching, you can probably decide when you want to retire, and how much money you will need to live comfortably. Saving that much money might be harder, but once you decide how much money you will need, you now have a goal-a long term goal. But defining and saving for short or medium term goals, which I consider 0 to 5 years (short term) and especially 5 to 10 years (medium term) can be more difficult. Retirement saving has special savings vehicles you can use, such as a 401k or a Roth IRA. How do you save for short and intermediate length personal finance goals, and where do you invest the money? Some people give young(er) people the advice that they should only invest in the stock market, and CD’s or bonds should be avoided. But this is generally for retirement investing. What about saving for goals with a shorter time period?

Less than 5 years- You want to keep risk to a minimum, so a high interest savings account such as ING Direct or other very low risk savings or investment account is ideal. You may want to save up for a car, or a down payment on your house, or build up an emergency fund. Your goal here is to preserve principle, but to get the best interest rate available to you at a reputable bank or other investment company with very low risk.

5 to 10 years- Even at an intermediate length of time, consider a high interest savings account, or other low risk investment option. I bonds or CD’s can be an option, especially if your goal is education related, like saving for your kid’s college education (I bonds are tax free if used for education). Since the stock market can be quite volatile over 5 to 10 years (especially 5 years), the market is not necessarily the best option to preserve capital while still earning interest. When you get closer to the 10 year time horizon, the rewards of stock market investing can begin to outweigh the risks, so consider your time horizon and invest accordingly.

10 to 20 years-or longer- Once you hit the 10+ year range, it is really time to start “investing” your money, and investing in the stock market such as buying index or mutual funds and investing your money in stocks or bonds. You have plenty of time to ride out the fluctuations in the market, so take advantage of the benefits and return potential of the stock market.

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• Ways to Deal With Financially Stressful Times
• I Can’t Predict the Future
• Are Your Sticking to Your 2008 Personal Finance Resolutions?-Review Your Progress and Get Back on Track Today!
• 7 Safe and Smart Money Moves for Unstable Economic Times
• Is Buy and Hold Investing Dead or Just Misunderstood?

How Are You Doing With Your Personal Finance Goals or Resolutions for 2008?

Now is a good time to perform a review of your 2008 personal finance goals to assess your progress. If you have been keeping up with your goals over the last two + months, you are probably doing well. After two months, the changes in your behavior you have made to reach your debt reduction or savings goals have probably become habits. If that is the case, it will be a lot easier for you to continue them throughout the rest of the year.  But if you are like most people, including myself, you may not be completely achieving the goals you have set, whether they are money related or something else.  Before you give up or stop completely, reassess your goals and get back on track.

Ask yourself the following questions:

Are your goals clearly defined? Your goals may be too vague, such as “I want to pay off all of my credit card debt this year.” Poorly defined goals do not lend themselves to being achieved. If you are paying off debt, you need to take the amount you want to pay off by the end of the year and figure out how much you need to pay off on a monthly or weekly basis. Your long term goal is then broken into smaller, well-defined short term goals. For example, snowflaking is a great way to continually focus on reducing debt.

Are you sticking to your plan? Did you promise yourself you would give up something to free up money for your goals? Did you? Have you looked at your expenses to see where you can trim them like you said you would? Have you figured out how you are going to meet your goals by planning your debt reduction or investing strategy?

Are you meeting milestones? Have you met any of your weekly or monthly milestones, such as paying $200/month towards your debt, or investing $50 out of every pay check?

Take time to assess. Now is the time to look at your goals with a “critical eye”. Be honest with yourself.  If your goals are too high, you will be unable to reach them and may be more likely to give up completely.

Adjust your goals by planning now. After assessing your progress thus far, consider adjusting your goals. If you can’t pay off $200/month towards your debt, how about $150 or $100? Pick an amount you feel comfortable with now and make that your weekly or monthly goal. You can increase this as time goes on.
Recommit your self to achieving your goals. Take the next few days to really think about your goals, why they are important to you,  why you want to achieve them, and the sense of security and freedom being debt free or building wealth will give you. Commit yourself to sticking with your revised plan and meeting your goals and get back on track!

Looking for ways to kickstart your debt reduction or savings goals? Try using extreme measures to give yourself a boost.

• Debt Reduction or Debt Elimination- Do the Words You Use Make A Difference?
• Single Step Personal Finance Challenge- Credit Card Debt Elimination
• Tips for Making Your Personal Finance Resolutions Stick- Turn Your Resolutions into Habits
• Debt Reduction by the Overwhelming Force Method
• Developing A Burning Desire to Improve Your Finances-Part II-Key Traits of Success