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If I told you that you would completely transform the way you think about money by completing a 30-day money challenge, would you believe me?
Short-term challenges are great way to help you jumpstart progress and drop bad habits. It takes 21 days to break a habit and 30 days to make it stick.
That’s why I created a 30-day money challenge. This 30-day money challenge is great for those with little to no personal finance knowledge, those that have been budgeting for years, and everyone in between ready to take the plunge.
30 days. 30 actions.
You’ll learn everything from how to save money and where to store those funds to how effectively organize your finances. In the end, I’m confident that you’ll have a completely transformed mindset and systems in place to prepare for your journey towards financial freedom.
Let’s get started!
Determine your financial goals
Setting financial goals helps you make smart decisions about your money. They help you determine how you want your money to work for you whether that may be paying off debt, saving for retirement or any milestone in between. In order for your goals to be effective, the must be S.M.A.R.T.
How to Set S.M.A.R.T. Goals
To make sure that your goals are clear, concise and obtainable, each one should be:
- Specific (clear, simple, significant)
- Measurable (meaningful)
- Achievable (attainable)
- Relevant (realistic, reasonable)
- Time-bound (timely)
A few questions you should ask yourself when goal setting are:
- What do I want to accomplish?
- Why is this important?
- How long will it take me to accomplish this?
- How can I accomplish this?
- Does this seem worthwhile?
- Does this match our needs?
- What I can do today, six weeks, and/or six months from now to help me reach this?
Once you set your goals, you’ll determine the real reason why you haven’t paid off your credit card or student loan debt or why you don’t have any money in your savings. It could be that because the timeline was unrealistic or your plan was way too vague.
Change your money mindset
Everyone is capable of reaching financial freedom. However, it does require work.
Many people use income as an excuse as to why they can’t turn their financial situation around, but managing your finances has very little to do with your income. Yes, having an income is important, but being good with your money is dependent on your spending habits.
If you can’t control your spending habits making $10 an hour, securing a job making $100 an hour won’t fix the issue. Begin tracking your spending and expenses right where you are today and watch just how much you’re able to stretch your paycheck.
Calculate your income
Knowing how much you make is important. You should be able to recite this number down to the penny. Being in control of your finances is about making use of the money that you have, not the money you think you have nor is it about the money you think you’ll receive in the future.
Be sure to account for income from all sources, including:
- Full-time job
- Part-time job
- Side hustle
- Child support and/or Alimony
Track your expenses
On day 4 of the 30-day money challenge, begin tracking your expenses even if you spend only $0.50. Tracking every cent you spend will help you begin to make conscious money decisions.
Most of our spending is done subconsciously or without thought.
Physically writing down your purchases, rather than digitally at first, makes a huge difference. After you’ve done this for at least seven days, you’ll notice that you’re more aware of your spending habits and will begin to think twice before buying anything impulsively.
Create a spending plan
Creating a spending plan for your money is a necessary step to transforming your finances. I recommend creating a zero-based budget, which is assigning a job for every dollar. This doesn’t mean that you spend every dollar earned. You’re just making a strategic plan on how you’ll spend your money until the next time you’re paid.
Trim an expense
Pay close attention to what your money gets you. Your money should be spent on things that matter to you the most.
When creating your monthly spending plan, be sure that your expenses match the things that you value. If you love to eat out, add a line item in your budget. If Starbucks brings you joy, set aside a certain amount to spend monthly. But if TV really isn’t your thing, cut the plug and eliminate that expense. If you don’t have time to go to the gym, call and cancel your membership and find an alternative way to work out that fits your schedule.
Many times, we pay for things because our parents did or because we’ve always done so. But, if you don’t use it, you’re basically throwing money away.
Review your spending plan again and ask yourself if all your expenses outside of necessities bring you joy. The ones that don’t, that’s where you can begin the elimination process. This is the best, and most effective way to cut monthly expenses without sacrificing things that you enjoy.
Cancel a subscription
Monthly subscription boxes and subscription plans have become a trend. Before you know it, you will have 10 monthly subscriptions totaling $300 a month. See if there are any subscriptions you may be able to consolidate or do without altogether.
For example, if you have Netflix and Hulu determine which one you use the most. You can also see if you can trade logins with a friend or family member, each one of you paying for one service to help eliminate an expense.
It may not seem like much since the monthly bill is just $10, but that’s $120 that could go toward reaching your financial goals.
Negotiate a bill down
If you’ve crunched the numbers and still feel like you’re unable to make any progress, consider reaching out to your service provider to negotiate a bill. They could be running a special promotion this month or offer you an extra discount for being a loyal customer.
Don’t be afraid to switch providers to save money. Your brand loyalty makes the companies rich and doesn’t benefit you much at all.
Assess your debt
You’ve reached day 9 of the 30-day money challenge. Now, it’s time to determine exactly how much debt you have. I know you may feel guilty or embarrassed about the amount you have, but admitting the amount to yourself is the first step. Your first challenge is to own your debt.
Review your statements or call your lenders and ask how much you owe and figure out what the minimum payment is. Once you tally up your debt, the total number may seem high, but there are thousands of people out there with more debt than you. You’re now well on the way to working towards getting that balance closer to zero.
Create a debt payoff plan
Getting out of debt requires much more than picking a debt payoff method. Whichever method you choose, the debt snowball or the debt avalanche, the most important part is that you create a budget and make a plan that you can stick to and that works best for your situation and your financial goals.
Making the commitment to pay off debt will help you free up cash, achieve your financial goals, and even raise your credit score.
Know your credit score
Most people don’t know their credit score until they need it i.e. apply for a loan for a house or car or opening a new credit card.
Don’t be one of those people.
The first step of improving your credit score is to know what your current credit score is.
Luckily there are a variety of online tools and apps that you can use to monitor your scores, such as Credit Karma or Credit Sesame. These are free resources to help you learn where you currently stand. You’ll have access to your score anywhere and at any time you want to see it.
Review your credit report
It’s important that you review your credit report at least once a year. You should not only know your score but know what’s impacting it, how to improve it, and if there are any inaccuracies that need to be removed.
Determine your net worth
Calculating your net worth is a great way to determine where you currently are financially and can help motivate you to get where you want to be.
Net worth is calculated by subtracting liabilities from assets.
A liability is anything that you owe money on such as a mortgage, an auto loan, personal loan, or credit card debt. An asset may include the value of your home, valuable possessions like jewelry or art, cars, investments, and liquid assets like cash in savings or checking accounts.
I personally use Personal Capital to track my net worth.
Start a side hustle
Asking for a raise or securing a part-time job are traditional ways to bring more money home. However, you can implement many side hustles on your own time, and many from home, to secure extra cash so that you can smash your financial goals.
There are endless opportunities to earn extra cash online and by doing simple tasks that others do not have time for or simply do not want to do. If you are looking for ways to make extra money, click here to learn 16 side hustle ideas to get you started today.
Establish an emergency fund
You’re halfway through the 30-day money challenge. Yay! Today is all about emergency funds.
Having an emergency fund is key to getting out of debt. So many people rely on their credit cards as an emergency fund. But guess what? Once you have an emergency and use your credit card to pay for it, your debt has continued to rise. If you can’t pay cash for an emergency, you more than likely won’t be able to pay off the credit card balance once the bill comes.
Having an emergency plan in place eliminates the need to use a credit card. I recommend saving $1,000 to get started and then working your way up to saving funds to cover a month of your expenses. Congratulations, you have become your own lender.
Open a high-yield savings account
Don’t be afraid to use online banks. As long as the account is FDIC insured, your money is safe up to $250,000.
Transfer your emergency fund to a high-yield savings account today so you don’t miss out on earning interest. Most traditional banks only accrue about .01% interest compared to up to 2% in a high-yield account.
Fear shouldn’t keep you from putting your money to work for you. Take the time to do the research and then commit to making the switch.
Create sinking funds
Sinking funds are an extremely helpful budgeting tool that helps you plan for future expenses whether known or unknown. Essentially, it’s a mini savings goal that you allocate money to for a period of time so that you can pay cash for said expense.
When you’re working hard to get in the groove of budgeting, it can be very frustrating when an unexpected expense pops up. It completely throws everything off and you’ll probably start to feel like a failure.
Whether your car needs a new battery unexpectedly or you forgot that your sibling’s birthday is this weekend and you totally forgot to add it to your budget, sinking funds are here to help. When sinking funds are in place, the amount of “emergencies” you have goes down drastically because you’ve prepared in advance.
Have a No Spend day
On day 18 of the 30-day money challenge, we’re going to have a no-spend day.
Incorporating no spend days plus tracking your spending will help you stay on track towards reaching your financial goals. It helps you learn to be intentional with your spending, appreciate everything you already have, and get creative when it comes to having fun.
Participating in a no-spend challenge monthly will help you realize that life is much more important than about acquiring things. Cutting excessive spending habits will help align your budget and everything else will fall in place.
Download cashback apps
Did you know that you can earn money on items that you planned to buy with just your cell phone? Yep, that’s a thing.
You can earn cash or rewards just by logging in through an app to make specific purchases or by scanning a receipt after leaving the grocery store. You’ll be so surprised how quickly you’re able to earn money just by using these cashback apps over time.
You won’t become a millionaire by using these apps, but many are a great way to add a source of passive income and make your budget stretch. It’ll take you a few minutes to set them up, but once setup is complete, you’ll be on your way saving even more money on your everyday spending.
Create a meal plan
Do you struggle with saving money on groceries? Do you often resort to fast food restaurants for lunch or dinner? If so, you need to learn how to meal plan to save time and money.
Keep a few of your favorite meals in rotation to make things easy and include themed nights to keep things fun.
Contribute to your 401K to get the employer match
Not contributing to your 401K to at least get your employer match is leaving a part of your salary on the table. You’re basically giving up free money.
Most companies match up to at least 5%. Find out whether or not your employer offers a match and sign up to contribute just enough to get it to your 401K. I promise you won’t miss the small amount coming out of your paycheck. Most of it was probably going to taxes anyway.
Plus, not only will you be getting an employer match, you’ll gain interest on your money. Compound interest is a beast.
Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.Albert Einstein
Organize your financial documents
Having all your important documents organized and in one place makes things so much easier. You never know when a disaster may strike or you may fall ill and you need instant access to your financial information.
If you’re married, be sure that your spouse knows where everything is as well and knows how to access all your accounts. Having a fireproof safe is a great option, or you can store your documents digitally in the cloud to prevent them from being destroyed.
Change your account passwords
There hasn’t been a shortage of comprised accounts lately. It’s important that you change your passwords regularly, use strong passwords composed of letters, numbers, and characters, and don’t reuse usernames and passwords across multiple accounts.
Review health benefits
It’s important that you know the benefits that are covered by your health insurance policy. This will prevent you from overpaying for a service or walking into a procedure and being blind-sighted by the cost.
Also, the people that work at health insurance agencies are human as well and make mistakes. Knowing your policy will help correct any mistakes a doctor’s office or your insurance company may make in a timely manner.
Finally, it’ll help you prepare financially for any service you may need to have. For example, if you’re having a baby soon, you’ll know exactly how much your portion of the bill will be once your little one arrives.
Monitor financial accounts
You’ve made it to day 25 of the 30-day money challenge and having sight of your financial accounts is very important. It helps detect fraud right away and you’ll know exactly how much money you have available, eliminating overdraft fees, late payments, or insufficient fund fees.
You don’t have to be overly obsessive and review your accounts multiple times a day as I do, but you should review them at least once a week to make sure your budget is reconciled and to monitor the account’s activity.
Review and/or update account beneficiaries
The length of time we’ll spend on Earth is a mystery to us all. So while we are here and are able to, it’s important that you keep your account beneficiaries up to date. The last thing you should want your loved ones to have to deal with in the event that you pass away is trying to gain access to the money you have left behind. Having it decided for them will help make the transition without you that much easier.
Get life insurance
Most people have both car and home insurance policies in place in the event that something happens. But what about life insurance?
Life insurance is put in place to pay a sum of money out to your family when you die. Having a policy in place is not preparing for your death, it’s simply ensuring that your loved ones are financially secure after you’re gone.
Life insurance can cover loss of income, funeral expenses, debt and other financial needs that might come up after you pass away.
It’s important that you use a reputable source to secure your policy with. I recommend getting a term life insurance policy, over any other type, because life insurance is to help your family after you’re gone, not to be sued an investment vehicle.
Adjust your allowances on your W4
Do you find yourself receiving a huge tax refund at the end of the year? Or do you owe year after and year, but have no idea why? Use the Tax Withholding Estimator on the IRS website to determine the correct amount of allowances you should claim so that you’re paying the correct amount of taxes yearly.
If you overpay on your taxes, you’re basically giving the government an interest-free loan. That money could have instead been used throughout the year to help you meet your financial goals. If you’re underpaying, you’re doing yourself a disservice because then you’re having to come up with a huge sum of money at the end of the year or get on a payment plan, dishing out tons of money in interest and penalty fees.
Read a personal finance book
Personal finance is a topic that a lot of people struggle with. I’ve read a lot of personal finance books, such as The Total Money Makeover by Dave Ramsey, Living Well, Spending Less by Ruth Soukup and Broke Millennial by Erin Lowry. These books gave me the foundation I needed to help me understand basic money management and that our finances were out of control.
Practice gratitude today
You’re amazing and made it to Day 30 of the 30-day money challenge. Give yourself a pat on the back and take time to notice and reflect on all the positive changes you’ve made to your finances. The change you want to see in your finances starts with you. Practicing gratitude will lift your spirits, help you over obstacles, crush your goals, and transform your life.
So much change can happen in 30 days. Even if you haven’t started or haven’t completed each task just yet, you’ve taken the first step needed to take control of your finances.
Take action now and watch all your financial goals come to life when you participate and complete this 30-day money challenge.
Like this post? Be sure to share it with others or with someone that can complete the 30-day money challenge with you.