Don’t fall off the wagon with your finances

The following is a guest post from John Gowan. John is the principal financial consultant at Financial Legacy Builders, an asset management and financial consulting firm that specializes in helping young adults eliminate debt, build wealth, and increase their giving.

Staying on Course with Your Finances

How many times have you started something that you never quite finished? If you’re like most people, there are probably too many instances to count. Oftentimes we start out so well with the best of intentions only to wind up disappointed in the end. We are determined to exercise more, lose a little weight, get on a budget, pay off debt, and start saving for our kid’s college fund. Then suddenly we get off track or start to slip back into our bad habits, leaving our lofty goals as mere distant memories. As Dave Ramsey likes to say, “Personal finance is 80% behavior and only 20% head knowledge.” As a result, financial goals such as paying off debt and diligently saving for the future actually have more in common with a weight loss program than they do with crunching numbers. If you want to see real change occur in your finances, it is likely going to require significant changes in your behavior, with focus and perseverance as two of the key ingredients.

The first key is to take time to identify your core values and to set goals in accordance with that value system. For Christians, this involves diligently praying for God’s guidance and direction on how we should invest ourselves to achieve His purposes in the world. By setting goals that reflect our values, we avoid the all too common pitfall of devoting our time to things of little importance in the grand scheme of life. According to Stephen Covey, many people climb the ladder of success only to find the ladder was leaning against the wrong wall. Setting value-based goals also helps to maintain a long-term perspective on life as opposed to constantly living for the moment, which tends to rob people of their future dreams.

The next aspect is to break down your goals into manageable steps with a clear and realistic timetable for completing each step. At the end of each step, consider setting up some type of reward for yourself that will motivate you through completion and help you celebrate your victories. It is also important to keep your goals clearly visible so that they serve as a constant reminder of your intended direction. Then tap into the power of focused intensity to pour your energy into accomplishing the necessary steps towards achieving your goals. Make every effort to block out distractions that divert your attention to less important matters.

The final aspect is perhaps the most critical. It involves having the perseverance to not get discouraged and to get back up after repeatedly getting knocked down. It’s a fact of life that things are not always going to go our way. Trials and adversity are part of every endeavor. “Failure is but a paragraph in the book of each human life. It is the pages that follow that ultimately define us.” (Jeff O’Leary, The Centurion Principles) The key is to continually believe in the impossible and to never stop believing even through the heartache and pain. Just remember that the sweetest victories are often the result of the toughest sacrifices.

How can we apply these principles to our finances?

Let’s look at one hypothetical example. Suppose through prayer and consideration that you felt your consumer debt was preventing you from being able to tithe a full 10% to your local church, which happens to be one of your core values. As a result, you decide to set the goal of paying off all of your non-mortgage debt within two years and then increasing your charitable giving to 10% the following year. To accomplish this goal, you list all of your debts smallest to largest and begin attacking your smallest debt with all of your available financial resources. Once this debt is paid off, you then attack the next debt on the list using the same focused intensity. You take an extra job, sell your ski boat, and start clipping coupons. You and your spouse decide to treat yourself to a night out on the town to celebrate every time you knock out one of your debts. You keep your goals and list of debts on your kitchen refrigerator, and you strike a line through each debt on the list as you pay it off. Your car had a major breakdown during this two year period, but you refused to let this discourage you from your end goal. At the end of two years, you successfully paid off all of your debt, and now you and your spouse are using your old debt payments to give more to your church and save for a trip to Hawaii to celebrate your newly discovered freedom.

Obviously these principles can be applied to all aspects of life, but the need to correct many of our bad habits often first shows up as a result of financial issues. Regardless of whether money comes into play, building a legacy is about focusing on what is most important in life and never backing down from the calling that God has set on your heart. After you do this repeatedly throughout your life, you will be able to say looking back that “I have fought the good fight, I have finished the race, I have kept the faith.” (2 Timothy 4:7)

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  1. [email protected]

    This is a good post–I think most of us move in to a certain lifestyle, then spend most of our time working to structure our finances to support that lifestyle, rather than fitting our lifestyle into our finances.

    It’s no wonder so many people go through crash and burn episodes with money, sometimes again and again.

  2. John DeFlumeri Jr

    It’s easy to slack off, just like going off a diet, or starting to booze it up again. It takes determination and personal committment, you are right.

  3. Mrs. DFx40

    This is why having a spouse (or a friend, etc) to pray with you and help you on your journey is so important. I balance everything once a week and my husband and I try to make it a point to sit down and look over our successes and failures every month, figure out what happened, and make a plan to fix it. Once a month may be too often for some, but with us paying cash for his school, and having specific goals of not working out tails off for the rest of our life (especially if/when kids come) makes it neccessary for us. It does make it easier that we are blessed to have the same moral and financial values.