The Moneystepper 2015 Savings Challenge has just been launched with the objective of helping participants accelerate their journey along the road to financial freedom. The general idea is that each member of the challenge will work towards two annual goals:
- % Increase in Net Wealth
- Savings Rate %
Whilst all participants will be judged against these same two measures, the actual percentages will be set individually and hence the challenge will be appropriate to everyone, irrelevant of their personal financial situation and future goals.
Some people may want to increase their net wealth by 200% and save 70% of their income.
Others may be facing a tough year and their objective may be to maintain the same level of net wealth and only save 1% of their net income.
Whatever you think you can manage is fine. Remember, you will only be measured against what you set as your goal for the year.
How Does The Challenge Help?
You may wonder how measuring these two goals will help you achieve them.
I thought the same thing. However, a few years ago I embarked on the same journey and quickly realised that two factors (measurability and accountability) were the two drivers that I required to improve my financial situation. They act as a catalyst to analyse your current financial situation, to reduce unnecessary expenditure, to improve your income or to fuel any required research to improve returns on investments.
To illustrate the impact that these two goals have, I’d like to share my journey since I personally started looking at these two goals.
A Little Bit of History
You see, I’ve always been good with money. I never spend extravagantly, I’ve never been in any significant amount of debt and I’m generally quite frugal. When shopping I’m sure to use coupons such as ones from GoGoShopper.
I left university 8 years ago with a very manageable amount of student loan (due to working throughout my time at university) and immediately got a well-paid job as an accountant at a Big4 practice.
I continued to be sensible with my finances. However, despite for 6 years, I never seemed to be getting any wealthier.
2 years ago that changed. It changed because I started working towards these two specific goals. It changed for two reasons:
- Measuribility– In 2013, I began to record every aspect of my financial life. I treated Graham Clark as a business: Graham Clark Ltd! Now, instead of just glancing at my bank account to estimate my financial position, everything ran like a business. It had a budget, it had a P&L statement (equivalent to my income/expenses) and it had a balance sheet (a detailed record of my net wealth).I spent hours improving this business. I would look for way to increase the revenue (income), methods to cut back on costs (expenses) and how to strengthen my balance sheet (net wealth).I did this for one year and my net wealth went from being stagnant (as it was every year for the 6 years before) to increasing by 96% in 2013!
- Accountability – But, it wasn’t enough. I found that I would sometimes slip up, miss a month-end recording or not worry about a splash of cash. After all, I only had myself to answer to if I messed up and, whilst I can be a bit of a bad-ass to myself, sometimes this threat doesn’t quite suffice!So, at the start of 2014, I started to publish my results on Moneystepper. This increased accountability. I knew that I would be judged every month. This really helped me tighten my finances even further and my annual growth in 2014 was 84% (this time from a higher base).
What’s in it for you?
So, why do I want you to join the challenge?
Well, the first reason is a selfish one: I want more people actively judging how I’m doing and critiquing my performance. This increased level of accountability will hopefully help me have another stonking year in 2015.
The second is that I believe this will help so many people improve their financial futures and accelerate their journeys to financial freedom. For even more explanation as to why I believe this is the case, check out the first episode of our Savings Challenge Podcast. Another huge (non-financial) goal of mine in 2015 is to help other people, and this is one way that I think I can achieve this.
Finally, to see exactly how the savings challenge can help you, and for the free downloadable “treat your personal finances like a business tracker” spreadsheet, head on over to Moneystepper’s 2015 Savings Challenge and take on this challenge for yourself.
I promise you, you won’t regret it!!