If you’ve never heard of money challenges, they’re essentially small (or rather large) challenges that you set for your personal finances. This can be anything from paying off student loans early, to paying more on your mortgage every month, to cutting your eating-out budget to $0 per month. Money challenges can be surprisingly beneficial, especially if finance isn’t exactly your strong point. Keep reading to learn more about the benefits of doing money challenges. 

Creating Better Financial Habits 

If you have several bad habits when it comes to your personal finances, a money challenge can be just the thing to set you straight. Perhaps you spend too much money before you pay bills, or you’re always late on your car payment. You can set either of those things as a money challenge to help you create better habits. 

Make a rule that for one month, you can only spend money after every single bill has been paid in full, or that you will pay your car payment on time no matter what; even if it means skipping out on movie night this month. Setting goals is good for personal and financial growth, and you might even find that your money challenges stir you to create better habits for yourself. 

Disciplining Yourself 

In order to make your new habits lifelong practices, you’re going to need discipline. Discipline is a word that pretty much means “no excuses”. With proper discipline, you’ll have no trouble refraining from buying your favorite items when you should be saving, or making payments on time for a month. 

Short-term money challenges encourage you to create discipline within yourself, which can have long-lasting effects well after you’ve completed your goals. Once you’ve sewn the seeds of discipline in your mind, they will continue to grow as long as you stick to your plan and remember why you’re doing the challenge to begin with. 

This newfound discipline will start to take root in other areas of your life as well, and before you know it, you’ll be organized, punctual, efficient, and financially savvy. 

Reaching New Goals 

Let’s be honest; reaching a goal feels amazing. When you’ve worked hard and disciplined yourself enough to hold the vision, when you finally reach that goal, it’s the sweetest-tasting fruit there is. There’s nothing wrong with getting a little self-esteem boost once in a while, after all. 

Did you know that self-esteem can actually have an effect on your productivity? If you suffer from poor self-esteem, you’ll be among many professionals whose performance has suffered from this condition. Poor self-esteem makes you feel like you don’t deserve or are unworthy of the benefits of your work; making performance drop dramatically. 

A self-esteem boost in the form of meeting a short-term financial goal is an effective way to keep yourself going. Once you reach several short-term goals, you can start setting goals for the long-term and reaching them with just as much determination. 

Saving Money, Of Course!

Money challenges are all about saving yourself money, cutting out debt, and creating greater financial abundance for yourself. Setting money goals helps you identify the factors that are holding you back from financial independence and create a plan to eliminate them. Remember that a debt-free life is always preferable to one where you’re drowning in the money you owe other people. 

If narrowing down your finances is proving difficult, you might benefit from hiring a financial advisor or other professional to put a fresh set of eyes on your finances. These experts will be able to identify issues you may not have seen, as well as assist you in formulating a plan to reach certain goals in the future. You can compare the 5 best financial advisors in San Antonio on the Careful Cents site. 

Increased Savings 

With more money available to you, you’ll be able to increase what you put into savings every year, and therefore increase your safety net. Having an emergency fund available is crucial should you lose the ability to work for an extended period of time, or if an unexpected expense occurs, such as car repairs or medical bills. 

With more money in savings, you can sleep better knowing that you and your family are taken care of in the event of financial distress. According to Yahoo! Finance, nearly 58% of Americans have less than $1,000 in their savings account. More than half the country would be unable to support themselves if they were suddenly out of work or confronted with high unexpected costs. 

A savings account can also help you with things like down payments for houses or vehicles, vacation expenses, etc. With more money at your disposal, you’ll be able to enjoy some of life’s simple pleasures without the concern of affordability. Financial freedom is about much more than just saving money; it’s about having the ability to choose where your money goes every month. That’s something that’s simply irreplaceable. 

The Bottom Line 

Money challenges offer plenty of benefits for those with the discipline and the determination to attempt them. Choosing a money challenge will help you realign yourself with your finances, and discover what true financial freedom means to you. Whether you’re paying down debt or just trying to create better financial habits, a money challenge can serve your needs and grant you a self-esteem boost when you do finally reach your goals. That sounds like a win-win!

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