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You are staring at a pile of bills. You want to get out from under them, but you don’t know how. You know you need to track spending, make a budget, get out of debt, get an emergency fund and on and on and on. It seems like improving your finances is just as overwhelming as living with a mound of bills.
It isn’t! At least not when you break down each step that you need to take to a brighter financial future into a small goal, taking time to make that one goal a habit before moving on to the next one.
12 Months To An Exceptionally Brighter Financial Future
Some of you might be able to complete a number of these tasks and make them a habit in less than a month. However, others might need more than a month to master one of these skills. Because of that, the 12 months is a general guideline; speed things up or slow things down as you need–BUT don’t get stalled! Be diligent to stay consistently progressing through all 12 steps.
Each step builds on the other. You don’t stop doing one step at the end of the assigned month, instead you add the next month’s goal on top of the habit you just finished mastering.
Month 1: Track Spending
It is hard to write up a budget if you don’t know exactly where your money is going in the first place. Take the first month of this challenge to track each and every penny you spend.
You can do that with a pen and a notebook or use a simple expense app on your smartphone. Either will work.
Month 2: Track All Sources Of Income
This month keep tracking your expenses, but track your income too–all of it. A lot of people track just their main paychecks, but I think it is important to track the little things too. The cash back check you got from the hardware store. The money you received for reselling those clothes you no longer needed. Add every penny that comes into your home.
Month 3: Write A Budget
Now that you know how much you earn and where you spend your earnings it is time to write a budget. Your budget will change almost every month as expenses and income change so don’t spend hours creating a pretty masterpiece. A simple typed out budget will do or even a handwritten one.
The important thing is that you have assigned every dollar of your money earned. Now some of you may discover that your expenses are larger than your earnings. If that is you, don’t panic–by the end of these steps you will have that corrected and be doing something to get rid of the debt you created while you were spending more than you earned.
If you have no clue how to even create a budget the book Debt-Proof Living: How to Get Out of Debt & Stay That Way by Mary Hunt can help. You can also download these free printable budget forms over at Queen of Free.
Month 4: Start Studying
This month you are going to learn how to make that budget balance by learning from thrifty masters how to stretch your hard earned dollars.
My top 3 books for those beginning their journey into the thrifty life are:
Month 5: Reduce One Budget Line
Starting with this month I want you to pick one line of your budget you think you can reduce, set a goal for the reduction and stick to that goal.
You can visit my save money on groceries page for tips on how to save money on your food budget, my saving money on clothing page for tips to keep your clothing budget down and my money saving tips page to figure out how to save money in pretty much any area of your budget.
When the month is over pick another area of your budget to lower. Repeat this step over and over each month, even if you just lower the chosen category by $5–it all adds up.
Month 6: Start An Emergency Fund
Now that you have a written budget and you are working on creating wiggle room in your budget it is time to create a vital piece in the puzzle that is your financial success: an emergency fund.
An emergency fund will stop you from digging out your credit cards to pay for car repairs, a broken water heater, emergency medical bills and so on.
Most financial experts suggest having at least a $1,000 set aside while you are paying off debt and after the debts are paid you should grow this to 3 to 6 months worth of income.
A great way to kickstart your emergency fund is to set aside some time this month to go through your home from top to bottom gathering things you no longer use to resell.
My reselling tips page if full of how-to suggestions for all sorts of different places to resell your stuff.
Month 7: Make Your Smartphone Pay
With a written budget and a $1,000 emergency fund it is time to generate some small streams of income that can help put a bit of fun in your budget.
Of course, you could use these tiny streams of income to pay for food,or clothing if you want, but I prefer using them to add a few treats to a otherwise treat-less budget.
I suggest starting with cash back style smartphone apps. These apps earn you points for purchases and other actions that you can then trade in for gift cards or PayPal deposits.
5 apps for Earning Gift Cards With Your Smartphone
The Ibotta app gives you rebates when you complete various tasks for a product in the app and then take a picture of the receipt for the product you chose in the app and upload it. Here is my step by step guide on how to use Ibotta.
Use my referral code QtTQg at sign-up (sometimes they offer a special when you do this–sometimes not).
MobiSave offers cash backs with no thresholds. What this means is if you pick 3 rebate offers all valued at say $0.10, then go shopping and upload your receipt, in 24 hours you will receive your $0.30 in rebates in the form of a PayPal deposit.
Here is my tutorial for how to use MobiSave: Earn Cash Back On Your Groceries with MobiSave
Sign up for MobiSave here (use my referral code OGHUVPZ)
Simply upload a receipt by taking a picture of it with your smartphone or tablet and watch your points and spins add up. There are lots of stores that qualify including Aldi. Read my full tutorial on Receipt Hog here.
Earn a free spin when you use my referral code YECT1667 when signing up
Sign up for Receipt Hog here (YECT1667)
If you shop for organic, gluten-free or NON GMO foods then you are going to want sign up for BerryCart. It works like a rebate program giving you money back for certain natural food purchases when you upload your receipt.
Here is my tutorial for the BerryCart App: Step By Step Guide To BerryCart App
Shopkick is the app that pays you to browse. You don’t have to purchase anything to earn gift cards through the Shopkick app. You simply sign in when you enter select stores and earn kicks just for entering in the store and/or by scanning select products while you shop.
See my tutorial (a Step by Step Guide To Shopkick) for more details.
Month 8: Make Your Time Online Pay
Swagbucks is a point program that allows you to download a toolbar. When you download this toolbar and enter your web searches through it you earn points called SB at random. These SB points can then be cashed in for gift cards for dozens of different stores and restaurants including Starbucks, Amazon and even PayPal.
Swagbucks also gives points when you shop at various online stores or daily deal sites. If you are searching the web or shopping online you might as well be earning gift cards for your time.
Month 9: Start Attacking Debt
Finally you and your family are gaining financial headway, now it is time to kick it up a notch and get rid of those monthly payments.
Pick your smallest debt and each month send in more than the minimum payment–as much as you possibly can. If you did not resell everything you could to create your $1,000 emergency fund now is the time to resell it and put the proceeds right on your debt.
When the smallest debt is gone roll that payment into the next smallest debt and start getting rid of it faster. Repeat over and over until you are left with just your mortgage. Depending on your level of debt this step could take years, but it will be worth it.
Month 10: Start Researching Alternative Streams Of Income
If you want the debt to be gone faster and if you want to have more financial freedom once the debt is gone, unless you already earn a very generous income chances are you are going to need to create an alternative source of flexible income.
For our family our flexible income streams include rental properties, my blog and my husband’s on call work. For your family chances are it will look much different–we all have unique talents and opportunities.
My Earning and Selling Tips Pinterest board is full of ideas for creating flexible side jobs.
Take a month to research what side jobs might work for you. Figure out whether there is a market for your idea, what the costs involved are for starting it and if you really have the passion for it.
Month 11: Stop Researching And Start That Side Job
At the end of one month stop researching ideas for side jobs, pick one and start doing all you can to get it off the ground.
Too many of us get stuck in research mode never to take the leap into action mode. You won’t earn a single penny researching–you need to take action.
Month 12: Start Dreaming BIG
You have now laid the foundation for a strong financial future. You have earned the right to stop wallowing in an overwhelmed state and start dreaming about the future.
When you and your family are out of debt what do you want to do? Take a vacation? A cross country RV trip? Move to a bigger home? Create and fund your own charity? Dream big and start striving towards that goal. When you do, watch BIG things happen.