I want to show you how to achieve your financial goals faster. No matter what goals you have in life, there are probably some financial milestones you need to hit along the way. Therefore, you need a tool to manage money and measure your progress. And, that tool is a budget.
Budgeting is not just for people who have challenges with their finances. Also, this tool is not only for those in debt. This has to be an essential part of your financial management system.
It will help you towards debt freedom, starting your first business, achieving a million-dollar net worth, giving back for generations, …. No matter what you want to build, or financial goals you want to achieve, budgeting needs to be a part of your financial foundation.
The Anatomy of a Budget
From my personal experience and experimenting with all the methods, there is only one way to budget … using a Zero-Based Budget. There are three major parts of the zero-based budget: (1) INFLOW, (2) OUTGO, and (3) ZERO. Actually, the third part is the answer to the math equation (INFLOW – OUTGO), and the target answer is always ZERO. There is no complicated arithmetic here.
This will be a 4-part series of posts. In the first two posts, I am going to show you how to reach your goals faster by paying attention to the INFLOW part of this equation. The second two posts will lead you through strategies for the OUTGO side.
So, are you ready to make budgeting a pivotal part of your financial plan? Let’s do this!
What is Inflow?
INFLOW is every category where you plan to bring money into this month’s budget. That includes your salary from your job, of course, but also includes the money you are going to pull from other accounts. You may be moving money from savings, for example, if it is time for that long-awaited vacation that you have been diligently saving up for.
You might have rental income. There may be a gift card you are finally going to use. Did you find some loose coins between the couch cushions? Yep, that is INFLOW too.
Obviously, the more money you have coming in on that side of the equation, the more money you must have going out. In other words, what comes in, must go out … toward your goals. That means you achieve your financial goals faster!!
In this post, I will walk through the first two of four ways to INCREASE INFLOW.
Achieve Your Financial Goals by Powering Up the Paycheck
Your income is most likely the largest number on the INFLOW side of the equation. Do not just let it get away with sitting there complacent. You need to realize its fullest potential.
Ask for a raise
If you have a salaried or hourly position, it is about time you ask for a raise. Ken Coleman, the author of The Proximity Principle, wrote a column in the Fremont News messenger answering a subscriber’s question about how to ask for a raise. This is what he said:
Asking for a raise is often more about posture than technique.
The best way to ask for a raise is to first research your industry, and more specifically, your job title. Go in with an attitude of humility and gratitude — combined with the research you’ve done, and your accomplishments with the company — and ask what you need to do in order to make more money. Don’t issue an ultimatum, or ask for an answer immediately. Have a friendly, professional conversation, and politely ask your boss to give your request consideration.
Remember, you can’t control how he will react. All you can do is approach the situation with the proper posture and attitude. In many cases, that makes all the difference. (Read the article here: Fremont News Messenger)
Wow! That is good stuff. Now, if you don’t have a job that is the job of your dreams, it might be worth looking for a better-paying job. Work with a career coach and read up on finding the perfect spot. WARNING: If you have an exceptionally good-paying job, remember, debt demolition is not going to take terribly long if you have a strong why. You should tough it out, count down the days, and add your 2-week notice to your why. Now, that will motivate you!
Achieving many times happens in the 5th Quarter
For those hourly paid jobs, don’t forget overtime. If you really want to get demolition in full swing, there is nothing like “time and a half” to get it going. Try working all those hours that everyone tries to avoid. You may be able to get even more pay for weekends, nights, and holidays.
When I was a young boy, I remember seeing my dad work some crazy hours to get out of debt. Yes, I missed him while he was gone, but it was only for a season. I wasn’t damaged by missing out on a few months of having him exhausted every day.
Looking back, I’m so glad I have that memory and example in my life. Your kids may not understand now, but they will thank you later for making this sacrifice.
Control your destiny
If you have a commissioned job, you know what you need to do to get a raise: work like you own the place. Have lunch with the top salesperson, listen, write down their advice, and act. Find a mentor or two. Surround yourself with “winners”, the people you look up to and are 1 – 2 levels above you. Don’t you feel better about your paycheck now? You may have never gotten so intimate with it like this before. When you unleash its full power, it can be your #1 INFLOW in your budget.
Achieve Your Financial Goals with a Side Gig
One paycheck is not enough. There are more ways to earn extra income on your off-hours today then there has ever been before. Working a side-gig has the obvious benefit of Increasing INFLOW, but there are other benefits as well.
You can achieve your financial goals with more focus, more motivation, and fewer distractions … but don’t forget to rest.
You are more focused on the task of blowing up debt from your life (or accomplishing any goal) when you are working like crazy. Therefore, I teach this when guiding my clients through the process of debt demolition. If you are not in debt and you are in wealth-building mode, you can use this strategy to frontload those investments. Remember, in the area of investing, early is greater than more. I digress.
One of my clients reported that they would come home after delivering pizza and go right to their debt snowball chart, filling in a square that represented a night’s pay.
He could visualize progress being made in real-time. The progress was almost tangible. Triumph was just around the corner. He could smell his why (or maybe that was the odor coming from his work uniform). Either way, he could see that it was worth it!
Another benefit of working day, night, and weekends is that you don’t have time to scroll mindlessly on the internet looking at all the stuff you should not be buying and places you should not be going. Staying away from TV ads and constant marketing is a good thing. After demolition is done, you may not want to go back.
Don’t Forsake Rest
Work like crazy, but do not go full throttle 7 days a week. I know this seems counter-intuitive but hear me out. Your mind and body can accomplish some incredible feats, but they need to be refueled and re-energized. One day a week it is imperative that you rest.
I know that I said to work as much overtime as you can stand. Yes, getting a side gig will certainly help you achieve your financial goals faster. But you must understand that renewal plays a pivotal part. Calendar your work schedule as well as your time of rejuvenation.
In the next post, I will walk through more ways you can Increase Your INFLOW. Until then, Zero In on your Financial Target.