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First Step

What's the first thing you should do if you want to improve your financial life? You might think it should be tracking your expenses or looking through your spending for the past month or 3 months or year. Getting that information is extremely helpful, but I'd argue that the first step is asking yourself why you want to make changes.

Do you want to buy more things, reach long term goals, or stop worrying about when you're getting paid next? Tapping into the motivation you have to change will help you stick with the changes you're considering.

For example, one of my big goals is to be able to buy a house. I started saving for a down payment about 5 years ago. Why is this an important goal for me? Because I live in a high cost of living area relative to average incomes and I know I have to save $80,000 or more to obtain a mortgage. I also have several friends a few years older than me who want to buy houses and there seems to be something about turning 30 that enhances the desire to have your own space. I want to be ready if that urge hits me in the next few years. I also want to have choices and not feel stuck paying high rent or living with roommates. Saving money for a house gives me more choices and freedom. One of the other reasons I decided to start saving is the opportunities available with owning a home. Long term planning is easier if you have a fixed mortgage versus paying rent that will go up over time at the landlord's discretion. If I can afford to buy a house and not depend on roommates, I can stop worrying about if roommates move out and how to pay the bills. A house gives me the opportunities to personalize my living space in ways I can't in a rental and to vacuum without bothering the neighbors downstairs.

So my why for saving for a house is to have options, to be prepared, and to be able to take advantage of opportunities as they come. Because even if I don't buy the house, having the funds available gives me options to do other things!

In this example, I have a strong why that motivates me to save aggressively for my goals. And even as my goals change, the why will stay the same. I think I'll always want to be able to make choices about my housing and career, feel freedom in living my life, and take advantage of opportunities.

What is your why for wanting to make changes?

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