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Apache is functioning normally

October 29, 2023 by Brett Tams

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law Firm’s editorial disclosure for more information.

The debt avalanche method is an accelerated debt repayment strategy that involves paying off the debt with the highest interest first, then rolling those payments to your next highest-interest debt until all your debt is paid off.

Getting out of debt can seem overwhelming when you’re sitting at your kitchen table trying to pay bills each month or if debt collectors are harassing you. It’s even worse when all you can think about is everything else you could spend money on: a family vacation, a new car. But with a bit of dedication and a plan, it’s possible to regain your financial freedom with an accelerated debt repayment strategy like the debt avalanche method.

Read on to learn how to use the debt avalanche method to pay off your debt faster than you may have thought possible.

What is the debt avalanche method?

The debt avalanche method is an accelerated debt repayment method. When using this strategy, you make minimum monthly payments on all your debts and put any additional funds toward paying down the debt with the highest interest rate.

Once you’ve repaid that debt, roll that minimum payment and additional funds over into the debt with the next highest interest rate. Repeat the process until you’ve paid off all your debts.

The debt avalanche method is a good strategy for most types of debt:

Student debt
Credit card debt
Auto loans
Medical debt

Debt avalanche vs. debt snowball: What’s the difference?

The debt avalanche is often compared to the debt snowball—another accelerated debt repayment method. In a debt snowball, instead of paying off the debt with the highest interest rate, you direct all your extra money toward paying off the debt with the lowest balance.

While both methods will pay off debt faster than if you had no strategy, you’ll see more quick wins if you opt for the snowball method, making it a good option for people who are easily discouraged.

You can also combine the two methods by prioritizing paying off the smallest debt with the highest interest rate to save on interest and see quick wins.

How to use the debt avalanche method to pay down debt

To use the debt avalanche method, follow these steps:

Build up an emergency fund. This will ensure an unexpected bill doesn’t throw off your payment plan. Experts recommend having enough in your emergency fund to cover six months of living expenses.
Make a list of all your debts. Include their balances, interest rates and minimum payment amounts. Organize your list from the highest interest rate to the lowest.
Total your monthly expenses and income. Add up all the money you spend on monthly living expenses and monthly minimum payments on debt. Also note your monthly income.
Determine how much money you have to put toward additional debt payments. Tally what you have left over each month after paying monthly expenses and minimum payments. You’ll put this “extra money” toward debt each month.
Each month, put the extra money toward the debt with the highest interest rate. This should be in addition to the regular monthly minimum payments.
Put any unexpected income toward the debt with the highest interest rate. If you get any unexpected income, such as a tax refund or bonus at work, put that toward your accelerated payment as well.
When you’ve paid that debt off, roll over that debt’s minimum payment and your extra monthly income toward the debt with the next highest interest rate. Continue paying the minimum payment on all other debts.
Repeat until you’ve cleared all your debts. As you pay off debts, your payments to the other debts will increase.

Debt avalanche example

Let’s look at an example use of the debt avalanche method.

You have three outstanding debts:

A student loan for $10,000 with 5 percent interest and a minimum monthly payment of $400
A credit card debt of $5,000 with 25 percent interest and a minimum monthly payment of $100
A home repair loan for $3,000 with 15 percent interest and a minimum monthly payment of $275

And after monthly living expenses and the three minimum payments, you have $250 leftover in your budget to put toward accelerated payments.

Since your credit card debt has the highest interest rate, start by paying the extra $250 in addition to the $100 monthly payment. That means you’ll pay $350 each month.

Once you’ve paid off your credit card debt, your debt with the next highest interest rate is the home repair loan, so that’s where you’ll start sending your extra payments each month. Roll over the $350 you paid monthly for the credit debt to the home repair loan. Added to the minimum payment of $275, you’ll pay $625 toward the loan each month.

When the home repair loan debt is clear, focus on your student loan, which has the lowest interest rate of your three debts. Roll over the $625 you were paying to the home repair loan to the minimum payment for the student loan, for a total monthly payment of $1,025.

If you use the debt snowball method discussed earlier, you’d start by paying off your smallest debt, which in this case is the home repair loan.

Pros and cons of the debt avalanche method

The debt avalanche method is one of the most logical and cost-effective debt repayment plans, but it isn’t perfect.

The advantages of the debt avalanche method are:

You’ll save on interest. This method helps you pay off your debt early, saving you what you would have paid in interest.
You’ll pay back your debt faster. By steadily making payments larger than the minimum, you can shave months off your repayment plan.

The disadvantages of the debt avalanche method are:

Larger debts can take longer to pay back. If you know you need small wins to stay motivated, this can negatively impact your ability to stick with your accelerated payment plan.
Unexpected bills or unstable income can hinder your progress. This method only works if you can make regular payments larger than your minimum payment.

Other ways to pay off credit card debt

While many people find the debt avalanche method to be a helpful strategy for getting out of debt, there are other ways to pay off debt that may better fit your situation.

You can also use any of the following methods:

Balance transfer credit card: Some credit cards have promotional offers for 0 percent APR on balance transfers to new customers. If you qualify, you can transfer your debt on a high-interest credit card to one of these cards. Pay attention to when the promotional 0 percent APR ends, or you’ll have to pay interest again. In this situation, it makes the most sense to devote any extra income after monthly expenses to this debt to clear it faster.
Debt consolidation loan: Take out a loan for the amount of all your debt and use the money to pay off those individual debts. Then pay off your consolidation loan each month. This makes repayment easier because you’re only making one monthly payment, but be careful that the interest rate on your consolidation loan is less than the interest rates on your other debt. Otherwise, you’ll end up paying more in interest over time.
Home equity line of credit: Borrow against your home’s equity. Often these lines of credit have lower interest rates than credit cards.
Debt management plans: If you cannot pay off your debt within five years even with a strict budget, or if your total monthly minimum payments are more than your monthly income, consider getting professional help. A debt counselor can help you create a debt management plan to pay off your debt. However, secured debt (a debt with collateral, such as your car or your home) won’t qualify for a debt management plan.

Is the debt avalanche method right for you?

The debt avalanche method is an excellent option for repaying debt faster, but it doesn’t fit every situation. If you are intent on saving money while you repay debt and are motivated enough to keep going without small wins along the way, the debt avalanche method may be your path to financial freedom. While using the debt avalanche—or any accelerated debt repayment plan—it’s essential to continue with behaviors that maintain or improve your credit. Stay current on all your bills, create and stick to a budget and track your spending. Lexington Law Firm may be able to help you on your journey to repair your credit. Take our free credit assessment today to learn more.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

Reviewed By

Alexis Peacock

Supervising Attorney

Alexis Peacock was born in Santa Cruz, California and raised in Scottsdale, Arizona.

In 2013, she earned her Bachelor of Science in Criminal Justice and Criminology, graduating cum laude from Arizona State University. Ms. Peacock received her Juris Doctor from Arizona Summit Law School and graduated in 2016. Prior to joining Lexington Law Firm, Ms. Peacock worked in Criminal Defense as both a paralegal and practicing attorney. Ms. Peacock represented clients in criminal matters varying from minor traffic infractions to serious felony cases. Alexis is licensed to practice law in Arizona. She is located in the Phoenix office.

Source: lexingtonlaw.com

Apache is functioning normally

September 30, 2023 by Brett Tams

Figuring out how to double your money with investments often hinges on striking the right balance between risk and reward. Your personal risk tolerance and goals can influence how you invest and the returns your portfolio generates.

However, doubling your money is a reasonable goal, especially if you’re willing to wait for your money to grow. And that’s a big variable to keep in mind: Time. If you’re interested in doubling your money and growing wealth for the long-term, there are several investing strategies to consider.

Investing Strategies to Double Your Money

1. Get to Know the Rule of 72

The rule of 72 can be a helpful guideline for answering this question: How long to double your money?

If you’re not familiar with this investing rule, it’s not complicated. It uses a simple formula to estimate how long doubling your money might take, based on your annual rate of return. You divide 72 by your annual return to get the number of years you’ll need to wait for your investment to double.

So, for example, if you have an investment that generates a 5% annual return, it would take around 14.5 years to double it. On the other hand, an investment that’s generating a 12% annual return would double in about six years.

The rule of 72 doesn’t predict how an investment will perform. But it can give you an idea of how quickly (or slowly) you can double your money, based on the returns you’re getting each year. Just keep in mind that the rule’s accuracy tends to decrease as the rate of return increases, so it’s more of a guideline than a hard-and-fast rule.

💡 Quick Tip: How do you decide if a certain trading platform or app is right for you? Ideally, the investment platform you choose offers the features that you need for your investment goals or strategy, e.g., an easy-to-use interface, data analysis, educational tools.

2. Leverage Your Employer’s Retirement Plan

One way to attempt to double your money through investing may be through your workplace retirement plan. If your employer offers a matching contribution to the money you’re deferring from your paychecks, that’s essentially free money for you.

Employer matching contributions are low-hanging fruit, in that you don’t need to change your investment strategy to take advantage of them. All that’s required is contributing enough of your salary to your employer’s retirement plan to qualify for the match.

The matching formula that companies use varies, but some companies offer a dollar-for-dollar match, meaning that the money you put into a 401(k) would automatically double when you receive your match. Keep in mind that some companies use a vesting schedule, meaning that you have to work at the company for a certain period of time before you get to keep all the employer contributions.

Aside from potentially helping to double your money, investing your 401(k) or a similar qualified retirement plan can also yield tax benefits. Contributions made with pre-tax dollars are deducted from your taxable income, which could lower your annual tax bill.

3. Diversify Strategically

Diversification means spreading your money across different investments to create a portfolio that will meet your needs for both risk and return.

As a general rule of thumb, riskier investments like stocks have the potential to generate higher returns. More conservative investments, such as bonds, tend to generate lower returns but there’s less risk that you’ll lose money on the investment.

If you want to double your money, then it’s important to pay attention to diversification and what that means for your return on investment. For instance, if you’re investing heavily in stocks then you could see greater returns but you might experience deeper losses if the market takes a hit. Playing it too safe, on the other hand, could cause your portfolio to underperform.

Also, keep in mind that there are many types of investments besides stocks, mutual funds and bonds. Real estate, stock options, futures, precious metals and hedge funds are just some stock and bond alternatives you could use to build a portfolio. Understanding their risk/reward profiles can help you decide what to invest in if you’re focused on doubling your money.

💡 Quick Tip: Distributing your money across a range of assets — also known as diversification — can be beneficial for long-term investors. When you put your eggs in many baskets, it may be beneficial if a single asset class goes down.

4. Consider Buying When Others Are Selling

The stock market is cyclical and you’re guaranteed to experience ups and downs during your investing career. How you approach the down periods can impact your ability to double your money when the market goes up again.

When the market drops, some investors start selling off stocks or other investments to avoid losses. But if you’re comfortable taking risks, the sell-off could present an opportunity to buy the dip.

If you can purchase stocks at a discount during periods of volatility when other investors are selling, you could double your money when those same stocks increase in value again. But again, making this strategy work for you comes down to knowing how much risk is acceptable to you.

5. Commit for the Long Term

There are different investment philosophies you can adopt. For example, traders regularly buy and sell investments to try and get quick wins from the market. A buy-and-hold strategy takes a different approach, but it could pay off if you’re trying to double your money.

Buy-and-hold investing involves buying an investment and holding onto it for the long-term. The idea is that during that holding period, the investment will grow in value so you can sell it at a sizable profit later.

This is a passive investment strategy that relies on patience and time to increase your portfolio’s value. The longer you have to invest, the more you can capitalize on the power of compounding gains, or gains you earn on your gains.

If you’re using a buy-and-hold strategy with a value investing strategy, you could potentially double your money or more if your investments meet your expectations. Value investing means investing in companies that you believe the market has undervalued.

This strategy takes a little work since you have to learn how to understand the difference between a stock’s market value and its intrinsic value. But if you can find one of these bargain hidden gems and hold onto it, you could reap major return rewards later when you’re ready to sell.

6. Step Up Your Investment Contributions

Another simple strategy to double your money is to invest more. Assuming your portfolio is performing the way you want and need it to to reach your goals, doubling your investment contributions could be a relatively easy way to boost your returns.

If you can’t afford to put big chunks of money into the market all at once, there are ways to increase your investments gradually. For instance, you could start building a portfolio with fractional shares and increase your contributions by a few dollars each month.

If you’re investing your 401(k) at work, you could ask your plan administrator about raising your contribution rate annually. For example, you might be able to automatically bump up salary deferrals by one or two percent each year. And if that coincides with a pay raise you may not even miss the extra money you’re contributing.

7. Focus on Tax Efficiency

Minimizing tax liability is another opportunity to stretch your investment dollars. There are different ways to do that inside your portfolio.

Investing in your retirement plan at work is an obvious one, so if you aren’t doing that yet you may want to consider getting started. Remember, the longer you have to invest, the more time your money has to grow.

If you don’t have a 401(k) or a similar plan at work, you could open a traditional or Roth Individual Retirement Account (IRA) instead. A traditional IRA allows for tax-deductible contributions, meaning you get an upfront tax break. Then, you pay ordinary income tax on that money when you withdraw it in retirement.

Roth IRAs aren’t tax-deductible, since you fund them with after-tax dollars. The upside of that, however, is that qualified withdrawals in retirement are 100% tax-free.

A taxable brokerage account is another way to invest, without being subject to annual contribution limits the way you would with a 401(k) or IRA. The difference is that you’ll pay capital gains tax on your investment growth.

Paying attention to asset location can help with maximizing tax efficiency across different investment accounts. For example, exchange-traded funds can sometimes be more tax-efficient than other types of mutual funds because they have lower turnover. That means the assets in the fund aren’t bought or sold as frequently, so there are fewer taxable events.

Keeping ETFs in a taxable account while putting less tax-efficient investments into a tax-advantaged account, such as a 401(k) or IRA, could help with doubling your money if it means reducing the taxes you pay on investment gains.

The Takeaway

Learning how to double your money can mean taking a slow route or a quicker one, but it all comes down to how much risk you’re comfortable with and how much time you have to invest. One of the keys to growing your investments is being consistent and that’s where automated investing can help.

There are numerous strategies and tactics that you can try to leverage to your advantage. But ultimately, whether you’re able to double your money will likely come down to how much you’re willing to risk, how much time you have on your side, and probably a little bit of luck.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

Photo credit: iStock/South_agency

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Claw Promotion: Customer must fund their Active Invest account with at least $10 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

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Source: sofi.com

Apache is functioning normally

May 23, 2023 by Brett Tams

As part of back to basics month, let’s use today to explore how you can get out of debt without gimmicks or games.

After twelve years of reading and writing about money, I’ve come to believe that debt reduction ought to be a side effect and not a goal. Getting out of debt is a target, not a habit. And, as we’ve been discussing recently, good goals are built around actions instead of numbers. If you restructure your life so that you’re spending less than you earn, you will get out of debt. It’s a natural side effect.

Having said that, I realize that a lot of GRS readers are struggling to get to square one. Getting out of debt is their goal and primary obsession. That’s okay.

Before you can begin repaying your debt, you must be earning a profit. Unless your income exceeds your expenses, your debt is actually increasing. If you’re continuing to add debt, or if you’re only able to make minimum payments, you must first find ways to spend less and earn more until you have a positive “saving rate”. (Both businesses and people earn profits. But when individuals earn a personal profit, we call it “savings”.)

After you’re earning a personal profit, you can (and should) make debt elimination a priority.

Why You Should Pay Off Your Debt

Debt repayment can improve your credit score, meaning you’ll pay less on everything from rent to car insurance to future borrowing needs. Plus, debt reduction is one of the best returns you can earn on your money.

Investing in the stock market provides an average annual return of about 10% — but that return isn’t guaranteed. Some years the market is up 30%, but other years it drops by 40%. When you pay down a credit card, you earn a guaranteed return of 20% (or whatever your interest rate is). That’s tough to beat.

There are also non-financial benefits to paying off debt, including:

Simplicity. The more debt you have, the more bills you have. It’s easier to manage your money when you have a simple, efficient financial infrastructure. Each time you pay off a debt, you move one step closer to this ideal.
Cash flow. Whenever you eliminate a debt, the money formerly used for that monthly payment becomes available to pursue other goals – including fun stuff like ski trips and knitting supplies.
Freedom. When you have monthly payments to meet, you’re chained to your job. You’re unable to take risks. Once your debt is gone, a wider range of options becomes available to you.
Peace of mind. Best of all, once you’re debt-free, you can sleep easier at night. You’ll put less pressure on yourself, and you’ll have fewer fights about money with your partner.

When I first tried to get out of debt, I lacked a system. Without a plan, I sent extra money to one credit card and then another. As a result, I never seemed to make any progress.

After deciding to become boss of my own life, however, I researched how to get out of debt. Many books recommended a strategy called the “debt snowball”. Although I was skeptical, I gave it a try. The method worked. Using it, I managed to eliminate my debt and begin saving for the future.

Stop Acquiring New Debt

This may seem self-evident, but the reason your debt is out of control is that you keep adding to it. Stop using credit. Don’t finance anything. Cut up your credit cards.

That last one can be tough. Don’t make excuses. I don’t care that other personal finance sites say that you shouldn’t cut them up. Destroy them. Stop rationalizing that you need them.

You don’t need credit cards for a safety net.
You don’t need credit cards for convenience.
You don’t need credit cards for cash-back bonuses.

You don’t need credit cards at all. If you’re in debt, credit cards are a trap. They only put you deeper in debt. Later, when your debts are gone and your finances are under control, maybe then you can get a credit card. (I don’t carry a personal credit card. I don’t miss having one.)

After you destroy your cards, halt any recurring payments. If you have a gym membership, cancel it. If you automatically renew your World of Warcraft account, cancel it. Cancel anything that automatically charges your credit card. Stop using credit.

Once you’ve done this, call each credit card company in turn. Do not cancel your credit cards (except for those with a zero balance). Instead, ask for a better deal. Find a low interest credit offer online and use it as a bargaining wedge. Your bank may not agree to match competing offers, but it probably will. It never hurts to ask.

Establish an Emergency Fund

For some, this is counter-intuitive. Why save for an emergency fund before paying off debt? Because if you don’t save first, you’re not going to be able to cope with unexpected expenses. Do not tell yourself that you can keep a credit card for emergencies. Destroy your credit cards; save cash for emergencies.

How much should you save? Ideally, you’d save $1,000 to start. (College students may be able to get by with $500.) This money is for emergencies only. It is not for beer. It is not for shoes. It is not for a Playstation 3. It is to be used when your car dies, or when you break your arm in a touch football game.

Keep this money liquid, but not immediately accessible. Don’t tie your emergency fund to a debit card. Don’t sabotage your efforts by making it easy to spend the money on non-essentials. Consider opening an online savings account. When an emergency arises, you can easily transfer the money to your regular checking account. It’ll be there when you need it, but you won’t be able to spend it spontaneously.

The Debt Snowball

With the debt snowball, you set aside a specific amount of cash each month to pay off the money you owe. At first, progress is slow. In time, however, you begin to make rapid progress, picking up speed like a snowball rolling downhill.

Step One

The first step is to make a list of your debts. For each obligation, include the balance you owe, the interest rate, and the minimum payment. Arrange the list so that the debt with the highest interest rate is on top. Next comes the debt with the second-highest interest rate, and so on, until you reach the final debt on the list, which will be the one with the lowest interest rate.

For instance, here’s the actual list of my debts from October 2004, ordered by interest rate:

Computer Loan: $1116 @ 15% ($48 min)
Business Loan $2800 @ 11% ($30 min)
Home Equity Loan $21000 @ 6% ($100 min)
Car Loan $2250 @ 5% ($170 min)
Personal Loan $1600 @ 3% ($100 min)
Personal Loan $6430 @ 0% ($60 min)

I had $35,196 in debt and my minimum payments totaled $508 per month.

Step Two

Once you’ve listed your debts, decide how much you can afford to pay toward them each month in total. This should be at least the total of your minimum payments ($508 in the example above), and preferably more. In my case, I started by allocating $700 every month toward debt reduction.

Step Three

Now, for all of your debts except the debt with the highest interest rate, make minimum payments every month. Use the rest of the money you’ve allocated for debt reduction to pay down the debt with the highest interest rate.

The computer loan topped my list of debts with an interest rate of 15%. The minimum payments for the other debts combined to $460 per month. Under this plan, I’d then take the remainder of the $700 I’d allocated toward monthly debt reduction and apply it to the computer loan. Instead of making the $48 minimum payment, I’d pay $240.

Step Four

Repeat this process every month until the debt at the top of the list has been eliminated.

Step Five

Here’s where this method gets powerful. With your first debt defeated, you don’t use your improved cash flow to buy new things. Instead, you use the extra cash to attack the next debt on your list.

If I start by applying $700 toward debt each month, for example, I continue to apply $700 toward debt each month until all of the debt is gone. After the computer loan is retired, I focus on the business loan. Because the minimum payment on my other debts would be $430, I could funnel $270 to pay off the business debt every month.

When the business debt is gone, I’d then throw $370 per month at the home equity loan, and so on. Ultimately, I’d be left with a single loan: the $6430 personal loan at 0% interest. Every month, I’d apply all $700 to get rid of this debt.

Pros and Cons

The debt snowball is powerful and effective. Mathematically, it’s the best way to get rid of your debt. There’s just one problem.

When you attack your debts from highest interest rate to lowest, you’ll pay less money in the long run. Unfortunately, many folks – including me – find the going difficult. In my case, I hit a wall when I reached the third debt on the list, my home equity loan. That $21,000 balance was going to take years to repay. I didn’t have that kind of patience.

Fortunately, I learned there were other ways to order your debts. You don’t have to tackle the high interest rates first.

Building a Better Snowball

Humans are complex psychological creatures. They’re not adding machines. Many of us know what we ought to do but find it difficult to actually make the best choices. (If we were adding machines, we wouldn’t accumulate consumer debt in the first place!) It’s misguided to tell somebody so deep in debt that they must follow the repayment plan that minimizes interest payments. The important thing to do is to set up a system of positive reinforcement.

Because of this, many people prefer slight variations on the debt snowball method. These methods ignore math in favor of psychology.

Dave Ramsey’s Debt Snowball

Financial guru Dave Ramsey has popularized one variation of the debt snowball. Instead of ordering your debts by interest rate, he suggests you attack those with the lowest balances first.

Using Ramsey’s method, my debts from 2004 would be ordered like this:

Computer Loan: $1116 @ 15% ($48 min)
Personal Loan $1600 @ 3% ($100 min)
Car Loan $2250 @ 5% ($170 min)
Business Loan $2800 @ 11% ($30 min)
Personal Loan $6430 @ 0% ($60 min)
Home Equity Loan $21000 @ 6% ($100 min)

As with the standard debt snowball method, I’d make minimum payments on each debt except the top one on the list. At it, I’d throw everything else I’ve allocated for debt reduction each month. When the top debt was eliminated, I’d move on to the one with the next smallest balance.

Ramsey’s variation isn’t as quick as paying high-interest debt first, and in the long-run, you’ll lose slightly more to interest payments. (In my own case, the projections showed it’d take an extra month to repay my debt and I’d pay and extra $841.15 in interest.) However, there’s a psychological advantage to doing things this way.

By attacking your smallest debts first, you get some quick wins, which provide a mental boost. This psychological lift provides extra motivation to keep attacking that debt. Every few months, you get the satisfaction of crossing another debt off the list! Ramsey says this is “behavior modification over math”, and he’s right. In fact, I opted to use this variation of the debt snowball when I repaid my own $35,000 of debt in 39 months.

Adam Baker’s Debt Tsunami

Other experts, including my buddy Adam Baker from Man vs. Debt, suggest yet a third alternative they call the debt tsunami. They argue it’s best to pay off your debts in order of their emotional impact. Attack your debts from smallest balance to highest, they say, but for added psychological boost, prioritize any debt that particularly bugs you.

“I used to be addicted to gambling,” Baker says, “and I had debt that was specifically associated with gambling. To pay that off first changed me as a person. To pay off the $600 I owed on a credit card was great, but it didn’t change me. It didn’t signify that my life was going to be different and that I was going to live in a different way.”

But paying off his gambling debt did mean something to him, so Baker attacked that first.

Here’s another example: Many people borrow money from their parents. These loans may carry interest rates of only two or three percent (or maybe they’re interest free), but they come with a lot of psychological baggage. This is another instance where it might make sense to pay down low-interest debt first because the non-financial rewards are so great.

The most important thing when paying off your debts is to pay off your debts; the order in which you do so is ultimately irrelevant. Find a system that works for you and develop the discipline to stick with it.

Note: It’s less imperative to repay low-interest debt. Businesses use “leverage” to borrow money cheaply so that they can earn higher returns elsewhere. You do the same when taking out a mortgage at low rate (like three percent) or using school loans to improve your education (which will, in theory, provide high future returns). It’s good to repay all of your debt, of course, but it’s okay to make repaying the mortgage a long-term goal instead of lumping it in with your debt snowball.

Supplementary Solutions

You can do other things to improve your money situation while you’re working on these three steps.

First, focus on the fundamental personal finance equation: to pay off debt, or to save money, or to accumulate wealth, you must spend less than you earn.

Curb your spending. Re-learn frugal habits. (Frugality is something with which most college students are all too familiar.) You can find some great ideas in the archives of this site. Also check Frugal for Life.

While you work to spend less, do what you can to increase your income. If possible, sell some of the stuff you bought when you got into debt. Get an extra job. (But don’t neglect your studies for the sake of earning more. Your studies are most important.)

Finally, go to your local public library and borrow Dave Ramsey’s The Total Money Makeover. Don’t be put off by the title — this is a fantastic guide to getting out of debt and developing good money habits. I rave about it often, but that’s because it has done so much to help my own personal finances. After you’ve finished, return it and borrow another book about money.

Simple, Not Easy

Human beings are complex creatures. Some of us are highly logical. Some of us are emotional. Most of us fall someplace in between. We rarely make decisions based on optimal paths; more often, we choose what makes us happy in the short term. I’m not saying that this is the right thing to do — it’s just what happens. For those who routinely make financial decisions based on emotion, it can be difficult to turn things around.

Complaining that personal finance is easy and “why doesn’t everyone do what they ought” is like saying that running a marathon is easy so why can’t everybody run one? Most of us understand how to prepare for a marathon — eat right and run a hell of a lot — but few of us have the dedication and mental fortitude to complete one. However, with a little discipline and some hard work, most people can complete a 10k race.

It’s the same with personal finance. It’s easy to say, “To build wealth, you must spend less than you earn”, but it’s another thing to do it, especially over the long term. In some ways, building wealth is more difficult than running a marathon. Training for and completing a marathon takes months. Dedicating yourself to a sensible financial plan is a lifetime process.

If personal finance were really as simple as understanding the math, we would all be rich. But it’s not. And we’re not. That’s why I think any small financial victory is important. That’s why I run this web site, and why I share whatever tips I can find.

I always say “do what works for you”“. Some people are able to succeed by paying high-interest debt first. But some people — myself included — have only been able to succeed by trying another approach. The approach may not be best from a mathematical viewpoint, but I believe that any method that actually helps you meet your goals is better than one that doesn’t.

Personal finance concepts might be simple, but that doesn’t mean they’re easy. I don’t mean to imply that they are. It took a lot of hard work (and a little luck) for me to get out of debt. It didn’t happen quickly, and it wasn’t easy.

The Bottom Line

As I mentioned at the start, I’ve come to believe that debt repayment is a side effect and not a goal. You shouldn’t make it your primary purpose.

If you do the other things I recommend, such as creating a personal mission statement and boosting your profit margin, you’ll naturally pay off debt as a matter of course. But you’ll enjoy a benefit many people don’t have once their debts are gone.

You see, a lot of people feel lost once they’ve dug out of debt. Search online and you’ll find tons of questions and conversations about what to do next. Debt repayment had given them purpose, and now that purpose is gone. As a result, they lose financial direction. And like a dieter who had aimed for a weight instead of a lifestyle change, an unfortunate few of the newly debt-free find themselves resuming bad habits.

If you’re pursuing other goals and intentionally building good habits, you’ll get out of debt. And once you get out of debt, the good times will continue: That debt snowball you’ve been building will transform itself into a wealth snowball.

Congratulations! You’re on your way to financial freedom!

Have you ever had to dig out of debt? What methods did you use? Were some more successful than others? If you had to do it over again, would you have done anything differently? What advice would you give to others who have just taken on the role of money boss in their lives?

Source: getrichslowly.org

Apache is functioning normally

May 23, 2023 by Brett Tams

Hey everyone! Today, I have a great guest post to share on how you can increase your Pinterest traffic to your blog. Ling sees over 100,000 monthly pageviews on her blog from Pinterest and she shares her best tips below, as well as in her new guide The Golden Compass To Pinterest Traffic. Enjoy her article below.

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Hi everyone!

My name is Ling and I created my first blog in the personal finance niche, Finsavvy Panda, along with a Pinterest business account in November 2017 when I was looking for ways to quit my job.

After reaching my first $18,000 monthly affiliate income with my first blog in the summer of 2019, I was beyond excited but nervous at the same time.

Excited because I would have never imagined earning this kind of income from home. But I was also nervous because all my earnings were coming from one blog. That’s when I started an anonymous lifestyle blog so I could diversify my online income and test my Pinterest strategies in different niches.

Today, I earn an annual net income of over $200,000 and it’s mostly thanks to the traffic I get from Pinterest!

Prior to creating a Pinterest business account to drive blog traffic, I used Pinterest like how any regular user would to get inspiration and ideas for home décor, crafty gifts, DIY projects, and healthy recipes.

In fact, I used to flip preloved furniture as a fun hobby for extra money so I could increase my savings.

I remember bingeing content on Pinterest to learn how DIY bloggers would sand, paint, decoupage, and design wooden furniture. Learning from the DIY crafty bloggers on Pinterest helped me earn an extra $500 to $2,000 per month with a flipping hobby!

This hobby allowed me to have fun and unleash my creativity, but I stopped refurbishing small furniture because the income was too active and linear.

Not too long after, I started a personal finance blog, followed by my lifestyle blog, and so far, I’m loving it because it can feel quite passive once you’ve put in the upfront work and effort.

Related content:

How To Get Consistent and Long-Lasting Traffic on Pinterest

After using Pinterest (from a consumer and business perspective) for several years, I am going to share my tips on how I consistently get over 100,000 monthly pageviews from Pinterest.

You may even come across periods when Pinterest sends you over 10,000 pageviews in ONE SINGLE DAY like how it has happened to me several times in the past:

It’s true that some blog niches will do better than others on Pinterest. However, I still believe that almost any niche can drive a good amount of traffic. It depends on what you write about and how you spin those topics on your blog to make it “Pinterest-friendly”.

On top of that, if you want to succeed on the platform, it’s important to understand it from the perspectives of a real consumer and a business user.

Because I had so many readers ask me for Pinterest traffic tips over the years of my blogging career, I created The Golden Compass To Pinterest Traffic, a very comprehensive A to Z step-by-step guide, to help bloggers and content creators succeed on Pinterest.

This guide is a one-stop shop to help brand new and intermediate bloggers create Pinterest content that will get ranked for consistent and long-lasting traffic. They are the exact strategies I used for two of my blogs, which were both accepted into Mediavine, allowing me to diversify my blog income with display ads.

Today, I wanted to share some of my insights with you on Making Sense of Cents, so here are my 7 actionable tips to help you get traffic and succeed on Pinterest.

1. Make sure you have a solid foundation on Pinterest

Before you get started on Pinterest to get traffic, you need to sign up for a Pinterest business account and make sure you build a solid foundation.

From my experience working with bloggers, many people immediately pin out random images that link back to their blogs without setting up the basic things first.

These include:

Claiming your website on Pinterest
Setting up what they call “Rich” pins
Optimizing your Pinterest profile, boards, Pin images, and Pin descriptions

You can’t just create a Pinterest account and start randomly pinning your posts without optimizing your Pinterest profile and having some sort of strategy.

2. Choose a category or niche and try to stick with it

You need to have an idea of what you’ll be blogging about most of the time. That way, you can create specific content and narrowed-down topics that tailor to a specific audience.

I want to say it’s okay to go a bit broader with your topics at the beginning when you have no experience with blogging, writing, or using Pinterest. But when I say go “broad”, I don’t literally mean write about everything and anything especially when you can’t spin those articles around by making them relate to each other.

For example, I don’t recommend writing one article about budgeting tips, the next article about chicken recipes, and then the next article about traveling in NYC. These three are not related and have nothing in common with each other. That will confuse not only your readers, but Pinterest will have no idea how to categorize you on the platform.

I understand that some of you may find it hard to stick to a dedicated niche, so here are my quick tips if you really want to write about everything.

Suppose you’re a general personal finance blogger. You could turn that chicken dinner blog post into budget-friendly chicken dinner recipes under $X. You can also write about cheap travels in NYC.

Alternatively, if you’re a travel blogger, you can spin those other articles around and write about budgeting for a travel fund, or the best chicken sandwiches in NYC. You get my point, right?

Having said that, I still highly recommend narrowing it down and don’t stray too far from your main niche.

As you write more content, you’ll get a feel of what types of topics you want to stick to in your long-term strategy. This is important because you want to tell Pinterest what your focus is so that the platform knows how to distribute your content to the right audience.

3. Don’t neglect Pinterest SEO and keyword research

One mistake I see many new bloggers make, including myself when I was a beginner, is they neglect Pinterest SEO and doing proper keyword research in their niche.

For those of you who don’t know what this means, don’t worry. I can quickly explain this in simple English for you.

“SEO” stands for search engine optimization and all that really means is writing blog posts that get searched by users and having them show on Pinterest.

Once you become a Pinterest business user, you’ll realize that Pinterest is more than just a social media.

It’s also a visual search engine where many users look for inspiration and ideas by typing specific keywords or phrases into the Pinterest search bar. It’s no different from searching for ideas and solutions to your problems on Google.

For example, when I was using Pinterest as a real user several years ago to look for refurbishing furniture ideas for my side hustle hobby (before I even started my blog), I would type the following phrases into the Pinterest search bar:

How to prime and paint a coffee table
How to make chalk paint or DIY chalk paint
DIY farmhouse rustic nightstand
Black and white decoupage ideas for side tables
Lion head drawer pulls

These are called “keywords” and simply searching for those keywords on Pinterest led me to many DIY, home décor, and craft bloggers! These DIY and craft bloggers most likely did keyword research and wrote many blog posts based on all those phrases that I (real user) searched for.

After reading those helpful blog posts, I made purchases on items like an orbital sander, drawer pulls, decoupage paper designs, and many more products through the bloggers’ affiliate links. These unique links allow bloggers to earn a commission every time someone clicks on the link and makes a purchase.

Affiliate marketing is one method bloggers use to make money with their blogs. Michelle has a fantastic e-course called Making Sense of Affiliate Marketing that teaches you how to implement affiliate marketing strategies onto your blog. I’ve taken this course several years ago and it’s the resource that helped me earn my first full-time income with affiliate marketing. I highly recommend it if you want to learn how to strategically insert affiliate links onto your posts so that you can increase your conversions and bring in more income!

As you can see, there are many benefits to learning Pinterest SEO and doing keyword research. You can capture your audience, help them with a specific problem, and earn money with those blog posts using methods like display ads and affiliate marketing.

I’m going to illustrate a couple of examples in the next point to help you prepare a list of blog post ideas for your readers!

4. Prepare blog post ideas using keyword research

By learning what users like to search for on Pinterest, you can come up with a list of profitable blog post ideas and prepare them in advance. This is how you can help your potential readers find and discover you on Pinterest!

To get started on keyword research, you have to first put yourself in the position of the user. Just like the example I gave earlier about myself when I was searching for DIY-related keywords as a real Pinterest user.

What would you type into the search bar when you’re specifically looking for something?

Another quick and simple way to do this is to type the first few words into the Pinterest search and see what keywords show up in the autocomplete drop-down.

If you’re a travel blogger, you can type something like “things to do in…” and you’ll see the following suggestions from Pinterest.

You can write at least 5 different blog post ideas based on this one simple search:

Things To Do in Chicago
Things To Do in Nashville Tennessee
Things To Do in London
Things To Do in San Diego
Things To Do in Boston

And the list of “things to do in…” can go on and on.

Another example is perhaps you want to recommend essentials to your readers. In this case, you can type “travel essentials” and mark down those suggested target keywords as your blog post ideas.

Once you hit enter after searching for your keyword or phrase, you’ll also notice the colorful tiles underneath the search bar. These tiny tiles are additional or related keywords.

For example, “travel essentials” is a general keyword or phrase. But when you use the pink tile, “for women” example, this becomes what they call a “long-tail” keyword. Instead of writing a blog post about “the best travel essentials” (this is the general keyword), you can also write another blog post to target an audience of women using the long-tail keyword, “the best travel essentials for women”.

After blogging for several years, I can tell you that Pinterest SEO is essential. You can’t afford to neglect Pinterest keyword research if you want people to find your articles!

5. Know who your audience is

In my first two years of blogging, I made a lot of mistakes with my blog because I didn’t really know who I was writing to.

Sure, you can “niche” down by only writing about personal finance and money topics like what I do on Finsavvy Panda, but truly understanding your audience is more than just “niching down”.

I always knew that I should be narrowing down and targeting a specific audience, but no matter how much I read or learned online about “know who your audience is”, I just didn’t fully understand that concept until more and more readers kept e-mailing me and asking me questions.

It wasn’t until my third year of blogging, or even last year, that this really hit me in the head!

Yes, doing keyword research is essential. But even after you have your blog post ideas ready based on your keyword research, you can’t blindly write without knowing who you’re speaking to.

Suppose you’re a male nutritionist and fitness blogger. Which audience are you tailoring your message to?

An unfit male who is overweight and wants a simple diet and exercise plan to help them achieve their weight loss goals.
An average-built male who wants to learn about a specific diet and workout plan to help them tone and build muscle.
A male who’s already fit and somewhat knowledgeable about specific diet plans but wants to go to the next level and bulk up even more.

As you can see, those are three very different audiences, and you can’t possibly write for all of them. The saying goes, “If you try to please everyone you’ll please no one”.

This advice about “knowing your audience” may sound like common sense, but you’d be surprised that many bloggers don’t really know who their audience is. To be honest, I still struggle with this part but I’m always learning more about my readers and testing new strategies to see what works and what doesn’t.

To get started on knowing your target audience, use Google and Pinterest analytics to analyze your data. It’s so easy to neglect this part, especially when you’re not an analytical blogger. However, to my surprise, when I started using this data, I was able to better target my audience and readers for more intentional traffic.

The more intentional you are with your content, the more quality readers you’ll attract.

6. Make your Pin design and titles click-worthy

The first step to getting your blog posts found is doing proper keyword research on Pinterest and “optimizing” your Pin descriptions. Doing that alone will increase your chances of ranking higher on the Pinterest search engine, allowing people to find your blog posts.

But what good is it when your Pin is shown on the organic searches without a click-worthy title?

I want to emphasize that you will get traffic as long as your Pins are shown on the feed, especially on organic searches. However, you can increase your traffic further just by simply making small tweaks to your Pin designs and titles.

I’ve tested this by coming up with a variation of titles on my Pin designs for the same blog post. There are a lot of factors that cause more or fewer clicks to your pages. Those factors include the audience on Pinterest, search volume for your target keywords, the Pinterest algorithm, and many more.

Holding all else constant, I noticed that whenever I made tweaks to a word, phrase, or even design on the Pins for my anonymous lifestyle blog, my click-through rate (AKA traffic) on Pinterest improved significantly.

For the sake of simplicity, let me illustrate an example. I am going to deliberately use blogging and business titles as examples here because I know it speaks to you.

Which of the following titles (for the same blog post) entices you to click in and actually read them?

How To Get Traffic on Pinterest in 20XX
How To Get Traffic on Pinterest and Monetize Your Blog in 20XX
The Ugly Truth About How Long It Takes To Get Traffic on Pinterest
10 Pinterest Traffic Tips That Nobody Tells You About
10 Reasons Why You’re Not Getting Any Traffic On Pinterest

Think about those Pin titles and ask yourself which one sparks the most curiosity.

You can also see one of my Pin templates used by my friend, Enoch from Savvy New Canadians. He made quick tweaks to the general pre-made template to target his personal finance audience and named his title “21 Easy Ways To Make An Extra $1,000 Right Now”.

This is a better headline than a boring title like “How To Make Extra Money”, “Best Ways To Make Extra Money” or “21 Ways To Make More Money” because the word “Easy” speaks to a specific audience who’s looking for quick wins, and the term, “right now” emphasizes to the reader that he/she can do something about it immediately.

Generally speaking, people are more likely to click in and read your post when you suggest something that’s relatively easier, quicker, and immediate.

You can use these Pin Savvy Templates to help you create beautiful and click-worthy Pins in just seconds. They are the templates I use to make over 100 Pins in less than 30 minutes hence saving me time and hassle.

Pin Design and Title Example Using One of Michelle’s Pin

When I was searching for “meatless dinner ideas” or “no meat dinners” on mobile, this Pin that Michelle used from the Pin Savvy Templates bundle showed up on the top searches on Pinterest. Michelle is ranking quite high on Pinterest with these related keywords about meatless meals on the platform as you can see in the screenshot:

This is what you’ll want to aim for – to have your Pins show up on organic searches when users are searching for keywords or phrases used on your blog post.

While designing your Pin, you’ll want to think about titles that will pique your readers’ interest because that is one thing you can do to increase your traffic on Pinterest when they find you on searches.

Click-worthy titles for Michelle’s blog post about meatless dinner can include:

10 Insanely Delicious Meatless Recipes You Need To Try Now (To target the general audience)
10 Budget-Friendly Meatless Meals Under $X (To target budget-conscious audience)
10 Insanely Good Meatless Recipes – Kids Approved! (To target families with kids who typically don’t like veggies)
10 Fast and Easy Meatless Dinner Ideas – X Minutes and Under! (To target people looking for quick and easy meals)
10 Healthy Vegetarian Dinner Recipes You’ll Want To Make Forever (To target health-conscious readers. Health-conscious people know that just because it’s vegetarian, it doesn’t necessarily mean it’s healthy, so you’ll want to call it out if it is.)

Noticed that ties back to the point I made above about targeting your audience.

Not only can you make your Pin designs pretty and click-worthy, but you can also see how you can attract a specific type of audience depending on what words you use in your headline.

7. See what’s trending on Pinterest

Look for some content ideas by using Pinterest Trends.

Pinterest Trends can be extremely helpful for bloggers in a number of ways. For starters, this tool can help you get an idea of what people are searching for on Pinterest. This is valuable information because it can give you an indication of what topics are popular and thus, worth writing about.

To get started on Pinterest Trends, go to “Trends” under the “Analytics” tab.

Once you’re there, you’ll see a variety of different categories that you can browse through. If you’re not sure where to start, try looking at the “What’s surging this week” section to see what’s currently trending on Pinterest. This section displays trends with high growth in search volume within the last 7 days, so you can take advantage of this information to see what you can write about.

The great thing about Pinterest Trends is that these ideas are not necessarily seasonal for one time only. You can reference them year-round! For example, if you see that “Summertime Recipes” is currently trending, you could write a blog post about summer recipes even if it’s not currently summer. This is valuable information because it allows you to be ahead of the curve and write about topics before they become popular again next year.

Aside from seasonal topics, you can also use Pinterest Trends to determine what content is popular among your target audience. For example, if you’re a beauty blogger, you could check out the “Beauty” category to see what topics are being searched for by Pinners on the platform. This information can help you come up with blog post ideas that are relevant to your audience.

Many people overlook Pinterest Trends thinking it’s only related to seasonal or current events, but this isn’t true at all. As bloggers, you can create an unlimited amount of evergreen content based on the information found in this tool.

What To Do When You’re Not Getting Any Pinterest Traffic or When Your Pinterest Traffic is Down

It doesn’t matter what platform, channel, or social media you use to get traffic, you’ll always experience a shift in pageviews. This is very normal and every blogger goes through it no matter how new or seasoned they are.

When Pinterest hits you in the face, the best course of action is to continue working on your blog. That includes writing new blog posts, updating your older content, learning how to use a tool, engaging with your readers, etc.

You can’t control Pinterest’s algorithm, but what you can control is writing new content on a consistent basis. This actually applies to all channels regardless if you’re on YouTube, Instagram, Google, Pinterest, etc. They are always thirsty for creators like you to consistently publish new content on their platform. It is a tried-and-true long-term strategy that almost never fails.

In fact, in The Golden Compass To Pinterest Traffic, I cover every single step you need to take as a blogger to succeed when you’re not getting any Pinterest traffic or when your pageviews are down. There’s more to it than just optimizing your Pinterest profile, boards, Pin design, and Pin descriptions. I go through everything a beginner needs to know and implement all the way to strategizing your content on Pinterest.

These are the Pinterest strategies I use to get consistent and intentional traffic to my blogs, which allowed me to quit my job and earn an annual six-figure income online.

About the Author: Ling Thich is the blogger behind Finsavvy Panda and Blog Savvy Panda. She also runs an anonymous lifestyle blog as a side hobby to learn and test different strategies. Overall, Ling loves teaching beginners how to start and grow their blogs on Pinterest. Outside of blogging, she enjoys staying active and exploring different cities.

What questions do you have about Pinterest? Do you use Pinterest to grow your blog? Why or why not?

Apache is functioning normally

April 25, 2023 by Brett Tams

One would think that short-term goals are pretty easy to accomplish. Oh, really?

Think again. Short-term goals can be easily put off for a plethora of reasons. Research suggests this as 91% of people fail on their New Years’ resolutions.

When it comes down to getting short-term goals done, including short-term financial goals, one must implement some strategies to stay on task and on schedule.

Let’s start out by discussing some strategies for achieving important short-term goals and then move onto some short-term financial goals that are worth your time and effort.

Grab your notepad, you’re going need it!

What’s the Difference Between Short-Term and Long-Term Goals?

Goals can have different timelines attached to them. For example, a short-term goal may take months or even years to achieve, whereas a long-term goal may take 5-10 years or more to reach. It’s important to be realistic about how much time you need and plan accordingly in order to make sure you can stay on track with your objectives.

Additionally, breaking down each goal into smaller steps can help make the goals feel more achievable. It may also be helpful to track your progress and celebrate successes along the way! More on that in a sec.,,

How to Achieve Important Short-Term Goals

A short-term goal is a goal that shouldn’t take you long to complete. Generally, I would define a short-term goal as a goal that takes roughly less than a year to complete. Many times, these goals only take a month or a few weeks. They could only take a day or two.

Short-term goals usually have a very clear path toward their completion. You know exactly how you’ll accomplish your goal – every step you’ll need to take. You can break the goal down into smaller pieces and then track your progress along the way.

It’s crucial that each of your short-term goals follow the “SMART” goal format.

What Are Smart Goals?

Setting goals can be daunting, but with the SMART framework, you can turn your aspirations into achievable objectives that will help you make meaningful progress towards your dreams! SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound.

Think of SMART as your goal-setting BFF! When you have a SMART goal in mind, you know exactly what you want to achieve, how you will measure your progress, and when you will achieve it. Whether you want to improve your finances, health, or personal growth, SMART goals can help you stay focused, motivated, and accountable.

SMART Goals	Stands For:
Specific	Clear and well-defined objectives
Measurable	Goals that have quantifiable targets
Achievable	Goals that are realistic and feasible
Relevant	Objectives that align with your values
Time-bound	Goals with specific deadlines

Unfortunately, even when you know exactly how you’ll accomplish your goal, there are a number of circumstances that can get in the way. Let’s explore how to push through these difficulties and find success.

1. Find your daily energy peak and schedule accordingly.

Unless you’re like The Rock and have seemingly unending energy and strength, your productivity will rise and fall during the course of a day. I know, you didn’t like me telling you that, but someone had to, right?

Short-term goals are best made progress on during the times of day you have high to moderate energy. If you’re saving these goals for the times of day when you’re in a slump, let’s face it: you’re probably not going to get ‘er done. Save the low energy times for leisurely activities.

Okay, so how do you find your daily energy peak? Here’s what I recommend . . . .

Set a recurring alarm when you first wake up for every 30 minutes. Every time the alarm goes off, rate your energy level on a scale of 0 (being no energy) to 10 (being high energy) in a notepad or on graph paper. You can do this for one day or you can do it for a week and average out the results.

This will allow you to see how your energy level changes throughout the day and will allow you to make better decisions regarding how you allocate your time and tasks.

I would recommend working on your short-term goals during the times of day that your energy level is a “5” or higher.

I remember when I first started this blog I was a night owl and had the most energy as the sun was going down. Today, I find mornings work better for me. The lesson? Make sure you adjust your tasks to your changing energy levels. Who knows, you might make a radical shift like me over time.

2. Work on one short-term goal at a time.

I have no idea why multitasking is so praised in our culture. Multitasking, in my opinion, slows people down and produces poor results. It’s much better to work on one short-term goal at a time.

Besides, these are short-term goals – not long-term ones. You’ll be able to get them done pretty quickly and move on to other tasks in short order.

Of your short-term financial goals, it might be worthwhile to work on the quickest short-term goals first – the ones that take the least amount of time. This will give you a few quick wins, which should motivate you to press on.

3. Eliminate distractions soldier!

During my time in the Army National Guard, I learned how to focus. In battle, there’s nothing worse than not keeping your head in the game. When enemies are nearby, it’s critical that you stay on task and don’t daydream. There are plenty of distractions in battle – some of which are set by the enemy – and they need to be avoided.

When you’re working on your short-term goals – including financial goals – you should eliminate any distractions.

When you’re working at home, there are plenty of distractions. If you have kids, you know what I mean. Now, kids are a great distraction, but you should be very careful to make sure they don’t pull you away from your other obligations.

For example, let’s say you have a monthly budget meeting with your spouse. Instead of having the meeting when the kids are running around throwing toys at you, it’s probably best to wait until they go to bed.

Other potential distractions include technology. Yes, while technology can help you accomplish your financial goals – like analyzing your investments with Betterment or Personal Capital – it can also send you alerts that aren’t relevant to the task at hand (like text notifications from your second great aunt Martha).

How do you eliminate technological distractions? Well, if you have Apple devices, it’s pretty easy to do so. On your iPhone, turn on Do Not Disturb. You can do the same thing on your Mac. This way, you can focus in peace and get some work done!

4. Dig deep to find your motivation.

Just like when you’re working on long-term goals, you need to dig deep to find your motivation for short-term goals.

Why do you want to start a budget, for example? If you don’t have a good enough reason or reasons, trust me, the number-crunching will get old fast and you’ll probably give up before you develop a working budget.

Imagine the benefits, for example, of creating a working budget. How will it improve your relationship with your spouse? How will it keep you on track with your long-term financial goals? You’d be surprised by how many motivations you can find for even the most seemingly mundane short-term financial goals.

Important Short-Term Financial Goals

Alright, you’re all geared up. You have some strategies for achieving your short-term financial goals, but which goals are worth your while? That’s what we’re going to talk about next, partner.

1. Create a budget.

Surprise! Just kidding. You probably guessed this one.

The truth is that a working budget is the cornerstone of any good financial plan. A proactive budget not only tells you what you’ve spent, but it tells you what you should and should not spend – that’s huge.

Over time, by working your budget, you’ll find ways to cut your expenses and discover new motivations for raising your income.

2. Create a system to pay your bills on time.

Thanks to technology, there are all kinds of ways to pay your bills. You might pay through your bank’s online bill-pay feature, you might pay through the merchants’ websites, you might pay using your debit or credit card, you might pay with checks – or you might pay with your smartphone!

Chances are, you’re using a variety of methods to pay your bills. But do you have a solid system in place? How will you know if your credit card expired and a merchant can’t pull money through auto-pay? Are you trusting the banks and merchants to let you know when your card is about to expire?

Sure, that might work. But perhaps it would be better to put everything into a spreadsheet so you can keep track of all of your bills and how they’re paid. You can also create reminders to pay in your favorite app!

3. Get appropriate insurance policies for your family.

Do you have life insurance? Disability insurance? Umbrella insurance? How about renters insurance? These policies are commonly overlooked.

Find the best insurance and make sure you’re covered.

Short-Term Goal Examples

If you’re looking for real life short-term goal examples, you’re in luck! I polled some fans on the Good Financial Cents Facebook page and here’s some of the best ones:

Joseph Hogue from PeerFinance101.com shares his goals:

Launch 4 short-format investing books as series in December
Publish three posts per week to each blog

Financial goals

Rebalance my portfolio allocation heading into my 40s. Still a year off (and I don’t generally try timing) but after almost 7 years of a bull market, will rebalance a year earlier and shift to new allocation
Buy and renovate another rental property (in Medellin, Colombia)

Life goals

Use social media more for personal connections and less for business (I realize the irony as I post this under my blog account)
reconnect with a couple of high school friends
start a hobby that isn’t related to personal finance or crowd-funding

Kate Dore from Cashville Skyline offers:

Reach $200K net worth by the end of 2025.
Renovate my basement to rent on Airbnb.
Earn $10K side income before next year’s FinCon.
Lose 20 pounds 🙂

Jacob Wade from iHeartBudgets.com shares his ambitious short-term goals:

Finish Kitchen Remodel by end of 2022
Pay Off Student Loans by end of 2022

Launch online course for blog in March/April 2023
MAX out Roth IRA for my wife and I in 2023
Remodel Master bath in 2023
Build deck/patio in backyard in spring 2023
Build raised bed gardens in side yard in April 2023
Get my butt into shape! Start in T-25 workout plan again

Those are some good examples of short-term goals. Here are some other examples you can use to kickstart your own short-term goal ideas:

Financial Goal	Specific	Measurable	Achievable	Relevant	Time-bound
Emergency fund	Save $10,000 in a high-yield savings account	Yes	Yes	Yes	By age 30
Retirement savings	Contribute at least 10% of your annual income to a 401(k) or IRA account, aim for $100,000 in retirement savings	Yes	Yes	Yes	By age 30
High-interest debt	Pay off $5,000 of credit card debt	Yes	Yes	Yes	By age 30
Credit score	Improve credit score to 750 or higher	Yes	Yes	Yes	By age 30
Budgeting	Create a monthly budget, track spending, and save $5,000	Yes	Yes	Yes	By age 30
Education and career	Invest in education or career development	Yes	Yes	Yes	By age 30
Investing	Invest $5,000 in stocks, mutual funds, or other investments	Yes	Yes	Yes	By age 30
Home down payment	Save $20,000 for a down payment on a home	Yes	Yes	Yes	By age 30
Estate plan	Create a will and estate plan	Yes	Yes	Yes	By age 30
Living below your means	Reduce expenses by 10%, increase savings rate by 5%	Yes	Yes	Yes	By age 30

How I Keep Track of Short-Term Goals

My short-term goals fall into two categories: Quarterly (90 day goals) and weekly goals. Each quarter I list out my goals and then make sure my weekly goals stay on point to achieving those goals.

One easy way I’ve recently implemented of staying on point is creating my weekly goals Sunday night. I’l create a note on my iPhone, but that’s only the half of it.

I then take a picture (screenshot) of my weekly goals and make that the lock screen on my phone. That way every time I turn my phone on I see the top 4-5 goals I need to accomplish that week. Here’s how it looks on my phone:

You’ll also notice I list my daily reminders of my Success Habits I do each day.

These include doing The Love Habits with my wife, writing in my Five Minute Journal, knocking out 50 push-ups, praying, and completing my Crush Your Day PDF (from my 10x Goals Accelerator course) before I go to bed.

I’ve taken achieving my short-term goals to the next level because of this powerful combination.

The Bottom Line – Short-Term Goal Examples

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So, there you have it! Setting short-term goals is an excellent way to achieve your long-term vision, improve your skills, and build momentum towards success.

By following the SMART framework, you can turn your aspirations into actionable steps that will help you make meaningful progress towards your dreams. Remember, short-term goals don’t have to be boring!

Whether you’re learning a new skill, connecting with new people, or saving up for a fun adventure, short-term goals can be exciting and fulfilling.

So, what are you waiting for? Grab a pen and paper and start setting some short-term goals today!

FAQs – Short-Term Goals

Why are short-term goals important?

Short-term goals are essential for several reasons. They provide a clear direction and purpose, help you break down larger goals into smaller, manageable steps, build confidence and self-efficacy, and improve your overall productivity and performance.

How do short-term goals relate to long-term goals?

Short-term goals are an essential component of achieving long-term goals. They help you break down larger objectives into smaller, more manageable steps and build momentum towards achieving your long-term vision. By setting and achieving short-term goals, you can stay motivated and focused, improve your skills and habits, and make progress towards your ultimate goals.

How do you prioritize short-term goals?

Prioritizing short-term goals depends on your personal preferences, needs, and circumstances. Consider which goals are most urgent, important, or aligned with your long-term vision. Prioritizing goals helps you focus your time, energy, and resources on the most critical objectives and avoid getting overwhelmed or distracted.

How many short-term goals should you have at once?

The number of short-term goals you should have at once depends on your capacity and workload. It’s generally best to focus on a few goals at a time to avoid getting overwhelmed or losing focus. Prioritize your goals based on their urgency, importance, and relevance to your long-term vision.

Source: goodfinancialcents.com

Whatâs the Maximum 401k Contribution Limit in 2022?

April 16, 2023 by Brett Tams

There are many benefits to contributing to a 401k plan: you can catch a break on your taxes, diversify your financial profile, and most importantly, a 401k can help you save up for your sunset years. But before you start contributing to your plan, you should take note of the 401k contribution limits in 2022

The post Whatâs the Maximum 401k Contribution Limit in 2022? appeared first on MintLife Blog.

How to Pay Off Credit Card Debt in 2023

February 24, 2023 by Brett Tams

Paying off your credit cards is a wise move. Here’s how you can do it.

How One Blogger Grew His Blog to Over 2 Million Visitors In A Year

February 17, 2023 by Brett Tams

Today, I want to introduce you to my friend Bobby Hoyt of Millennial Money Man and Facebook Ads For Bloggers. In just three years, Bobby has been able to earn over $750,000 in income from his blog, and I don’t see that slowing down anytime soon. Bobby is a former band director who left his […]

The post How One Blogger Grew His Blog to Over 2 Million Visitors In A Year appeared first on Making Sense Of Cents.

How to retire young

January 31, 2023 by Brett Tams

I am both a money nerd and a book nerd. Naturally, I get a little giddy when I find old books about money I’ve never heard of before.

While browsing Oregon’s best used bookstore earlier this year, I stumbled on a 1989 book called How to Retire Young by Edward M. Tauber. Tauber retired at the age of 43 from a tenured full professorship as Professor of Marketing at the University of Southern California. He’s written a number of marketing textbooks, but this was his first (and only?) foray into the realm of personal finance.

How to Retire Young is one of the oldest books I’ve found on the subject of early retirement. It’s fun to see how much of the modern financial independence movement is foreshadowed in the book’s pages.

It’s also fun to see how closely How to Retire Young adheres to my own “get rich slowly” philosophy. “Much [financial advice] is oriented toward the quick buck,” writes Tauber, “taking paths that often have a low probability. In short, you might as well play the lottery.”

Tauber has a different philosophy. He urges readers to “take the high road”. He wants them to follow the path with the greatest odds of success, even if that path might not lead to quick wins. He also cautions that “there’s no best way for everyone”, just as I say “do what works for you”. There are certainly best practices and mathematically optimal options, but there aren’t any right options.

You Can Retire Young

Tauber’s premise is that many people can retire early — if they plan and remain dedicated to the plan. He writes:

“If you want to retire early, there are no magic formulas. It requires hard work to make money and requires smart work to learn how to invest on a pretax basis. If you invested 15 to 20 years in school to learn how to make money, why not spend a little effort to plan how to capitalize on your earning power to be able to enjoy it for a third of your life on your terms in early retirement?”

“Think of life has having three periods: schooling, working, and savoring,” he says. Most folks spend the first 20 to 25 years of life in school, work for 40 to 50 years, then leave what’s left for “savoring”. He suggests shifting our perspective. “Why not plan life in three equal installments?” he asks. Spend 25 years in school, work for 25 years, then savor another 25 years — or more.

The issue, as you know, is that there are trade-offs. The opportunity cost of retiring young is the stuff you could have had (and the things you could have done) during your working years. “Early retirement is like anything else that you can purchase,” Tauber writes. You probably won’t have as much discretionary income while you’re saving or when you retire, but you will have the time to enjoy what you do have.”

Tauber says the reason most people don’t retire early is they don’t think it’s possible. More than that, they’re not willing to wait to spend their money. They want to spend it now. They’re working hard, earning money, and they feel like they deserve to indulge themselves.

What’s more, the average person “cannot visualize the possibility that [work] might slow or stop”. People fall victim to the forever fallacy. As a result, they get trapped in what Tauber calls the work-spend cycle.

When you want everything now, you get it now — but that means exactly what it implies: having it now, not later. “It’s a prescription for a lifetime of work and spend,” Tauber warns. It’s also a prescription for living on less when you’re older. If you want money now and later, you have to plan for it. You have to want it badly or it won’t happen. And “if you want to retire early, you have to do it yourself, using the system to your best advantage.”

Quick money wins to help you feel more in control of your finances

January 25, 2023 by Brett Tams

I cringe when I remember learning to drive. At fifteen-years-old, I was impatient, full of nervous energy, and so short that I could barely reach the steering wheel. (Which is still kind of a problem, but I digress.)

My parents were backseat driving, of course, instructing me on how to drive the rural, dirt road just outside our neighborhood. âLet off the brake,â they said, and the car began to coast, slowly. Cool, I can handle this, I thought. âHit the gas,â they said. Chaos ensued.

I swerved into the other lane, and when I yanked the steering wheel to straighten out, the car jerked in the other direction and I almost hit a fence post. My parents shouted. I screamed. All of us were terrified. I felt completely frazzled and out of control. It was like the car had a mind of its own.

For many of us, managing money feels something like this. We try to make a budget and set some limits for our spending, but our financial situation always seems to have a mind of its own: your bank account overdrafts, you get a pay cut at work, your vet bill is considerably higher than you expected.

But just as when you were learning to drive, developing a sense that you’re in control can make a huge difference. When I finally felt like I was the one controlling the vehicle, driving became second nature.

Research, like this 2014 study, shows that simply feeling powerful inspires people to make better financial decisions. They develop financial confidence. For this reason, Iâm a fan of quick money wins â small achievements that may not make a huge difference on paper, but which do wonders for how you feel about your financial situation. These quick wins wonât make you a millionaire overnight, but they can empower you, and thatâs everything.

Quick wins give you financial confidence, and that helps you make better money decisions in the long run. (As the study put it, âfeeling powerful increases saving.â)

In other words, change your attitude about money and you can change your behavior with it, which can lead to actually being in control of it. Try your hand at a few of my favorite money wins.

The debt avalanche method is an accelerated debt repayment strategy that involves paying off the debt with the highest interest first, then rolling those payments to your next highest-interest debt until all your debt is paid off.

What is the debt avalanche method?

Debt avalanche vs. debt snowball: What’s the difference?

How to use the debt avalanche method to pay down debt

Debt avalanche example

Pros and cons of the debt avalanche method

Other ways to pay off credit card debt

Is the debt avalanche method right for you?

Alexis Peacock

Investing Strategies to Double Your Money

1. Get to Know the Rule of 72

2. Leverage Your Employer’s Retirement Plan

3. Diversify Strategically

4. Consider Buying When Others Are Selling

5. Commit for the Long Term

6. Step Up Your Investment Contributions

7. Focus on Tax Efficiency

The Takeaway

Why You Should Pay Off Your Debt

Stop Acquiring New Debt

Establish an Emergency Fund

The Debt Snowball

Step One

Step Two

Step Three

Step Four

Step Five

Pros and Cons

Building a Better Snowball

Dave Ramsey’s Debt Snowball

Adam Baker’s Debt Tsunami

Supplementary Solutions

Simple, Not Easy

The Bottom Line

How To Get Consistent and Long-Lasting Traffic on Pinterest

1. Make sure you have a solid foundation on Pinterest

2. Choose a category or niche and try to stick with it

3. Don’t neglect Pinterest SEO and keyword research

4. Prepare blog post ideas using keyword research

5. Know who your audience is

6. Make your Pin design and titles click-worthy

Pin Design and Title Example Using One of Michelle’s Pin

7. See what’s trending on Pinterest

What To Do When You’re Not Getting Any Pinterest Traffic or When Your Pinterest Traffic is Down

Related Posts

What’s the Difference Between Short-Term and Long-Term Goals?

How to Achieve Important Short-Term Goals

What Are Smart Goals?

1. Find your daily energy peak and schedule accordingly.

2. Work on one short-term goal at a time.

3. Eliminate distractions soldier!

4. Dig deep to find your motivation.

Important Short-Term Financial Goals

1. Create a budget.

2. Create a system to pay your bills on time.

3. Get appropriate insurance policies for your family.

Short-Term Goal Examples

How I Keep Track of Short-Term Goals

The Bottom Line – Short-Term Goal Examples

FAQs – Short-Term Goals

You Can Retire Young