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Get Out of Debt

7 Steps to Financial Success

Often times, people get discouraged when they think about achieving financial success because they feel so far from reaching the finish line. CashBlog thinks of financial success differently, however. CashBlog isn’t just about reaching the finish line, it’s about all of the little steps one takes from the start to the finish and in between. Each one of these steps is, in reality, a step of success. Success isn’t just about the end, it’s about the beginning and the in-between as well. Each step that one takes toward their financial goals is and should be consider a success. In that vein, I thought I’d outline 7 steps to financial success for you today. Remember that each time you complete one of these steps, you’ve succeeded in an action step that breeds success.


Step #1: Run the Numbers

It can be a scary thing to sit down and analyze your financial situation. Many individuals and families have little or no idea where they sit financially. To go from knowing nothing to facing up to your financial situation is often akin to looking in your closet for skeletons. It’s a frightening task. As such, when one gathers the courage to write down the numbers and get a clear and true picture of their financial situation, they should congratulate themselves on having the strength to complete that step. It doesn’t matter what the analysis shows – what matters is that you had the guts to face the numbers and write down your current financial situation. This, my friends, is a huge financial success.

Step #2: Accept Your Situation

When Rick and I first sat down and faced our situation (after we were brave enough to run the numbers), we really were in shock. We knew things were on shaky ground, but we had no idea what kind of numbers we were dealing with. It took us many months of shock, guilt, fear and self-condemnation before we finally accepted the situation we had created. We had over-used our credit cards and were spending more than we were bringing in.  Don’t waste too much time on these emotions. Yes, it’s okay to be mad, to feel bad and to beat yourself up – for a short time. But spending too much time on these emotions is a waste because it takes your focus away from the next steps, which are more productive. Choose instead to accept what is already here and move on.

Step #3: Create a Plan

What’s done is done, and now it’s time to fix it. Using Dave Ramsey’s debt snowball plan or whatever other plan you think will work best for your situation, it’s time to make a plan. List all of your debts and figure out which one you’ll tackle first, second and so on. Determine where you can take other money from to put toward debt. Gather a few hundred dollars for an emergency fund. Temporarily decrease your 401k contributions to the company match limit. Challenge every expense and see what you can cut back on until the debt is down or gone. Make a concrete plan with solid steps that works for you.

Step #4: Work the Plan

This can be a scary step as well. A journey of a thousand miles begins with a single step, and sometimes it’s hard to imagine when you’re walking a thousands steps that you’ll ever reach the finish line. This is where it’s important that you don’t look too far ahead. Put one foot in front of the other, and just keep taking steps. The success isn’t just in completing the journey, it’s in having the courage to take the steps to get there. Every step that you take to work your plan is a success and a victory. Cutting cable is a victory. Putting an extra $5 or $10 toward the debt you’re currently working on is a victory. Choosing to eat a bag lunch at work when you’d rather go out to eat is a victory. Bringing coffee from home instead of stopping at Starbucks is a victory. Staying on budget is a victory. Work your plan, and know that each time you work your plan you are succeeding – now.

Step #5: Persevere

In my 3+ years of blogging here, at The Frugal Farmer and at the various sites I’ve freelanced for, I’ve never ever met a person who didn’t have setbacks on their journey to financial success. Sometimes it’s an unexpected expense like a car or home repair. Sometimes it’s a job layoff. Sometimes it’s a meltdown splurge on something that wasn’t in the budget. Setbacks happen. Don’t let them define you. Instead, get back on that horse and choose to move forward. Choosing to move forward every day, regardless of the setbacks, is achieving success.

Step #6: Reward Yourself

Persevering can be the most difficult part of a journey to financial success. It gets mundane. Boring. Painful at times as one grows sick and tired of budgeting, not eating out, whatever. When you find yourself getting a bit claustrophobic about your plan, a reward may be in order. I’m not talking about a trip to Hawaii, here, but each person/family must determine what kind of reward will rejuvenate them for their journey. Maybe it’s dinner out. Maybe it’s a manicure at a salon or a trip to a water park for the day. When you’re feeling like your trapped in the throes of debt repayment and you just can’t take it anymore, maybe it’s time for  a little celebration. A pick me up that will remind you of how far you’ve come and how well you’re doing.

Step #7: Change Things Up

Another way to handle the mundane task of reaching debt freedom or financial independence is to change things up. Creating a new plan often given new life and energy to those working the plan. The change can be big, like selling something big to catapult your debt freedom goals, or it can be small, such as adding in a homemade pizza night to the weekly menu and counting up all of the change you’ve collected for your debt payoff goal. Maybe you can rearrange the furniture to give your old furniture a new look as you wait to save up for new stuff. There’s something about change that can bring new life to a goal.

The takeaway here is that everything you do to help ensure you stay on track in your goal to debt freedom is a success. So don’t view it as “just another step through the mud” of your debt mess. Instead, view each step as the victory it is.  Cheer, wave your hands in the air and do a little dance, knowing that you are indeed headed for the finish line.

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Erin Thompson

Erin Thompson spent years managing her own blog about budgeting and debt. Because of that, she has great insights not only about managing spending and borrowing but also about running websites profitably. When she's not writing articles for us, she's traveling and looking for new types of wines to try.
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