I would say one of the biggest challenges my husband and I used to have was keeping our financial goals. We were GREAT at setting them, but not so great at keeping them or even remembering what they were. Setting goals is important in life, but if you don’t keep them, there’s really no point in even setting them.
Now, we’re pretty good at keeping all of our goals. Wanna know our secret?
The secret to keeping your financial goals
PLAN FOR THE SHORT-TERM. More often than not, we would set a goal that was too far out into the future, such as “Save $15,000 this year.” While that was a great goal, since it was so far away it made it easy to forget about it or at the very least it made us feel like we didn’t really have to “act now” because, I mean, we had ALL YEAR to save $15K, right?? Short-term goals are much easier to stick to and they keep your focus in the now.
So, instead of setting a goal to save $15K each year, we’re aiming to save 1K each month (for those of you that are new, my husband and I are both self-employed and we’re not sure what our income is going to be yet, so this is actually a rough goal). Or we’ll set a goal to only spend $25 on dinners for the week to feed our family of four (this goal was met!).
What our financial goals look like
Everyone’s financial goals are going to be different. We don’t have student loans (paid them off), but we do have a $20K car loan. We have our emergency fund saved up, but we are trying to add to our savings for a down payment on a house. We’ve cut cable and other unnecessary expenses, but we probably go out to eat too much. We’re all different. Set goals that work for you and your family.
A few of our financial goals are as follows:
- Save for a down payment on a house. (General, I know…but this is what the $1K a month will go to.) When we first moved to NC, we wanted to buy a cheap house just so we could avoid paying $1300 a month in rent. Now that my husband is self-employed, we’re going to have to wait at least two years to even qualify for a home. This completely changed our thinking. We’re focusing now on earning more money that way we can afford our dream home, whether that’s in two years or five years. In the meantime, we will continue renting. Renting, even though pricey, does have many advantages.
- Contribute $100 per month to our new USAA mutual fund accounts we just opened (check! This will be done automatically.)
- Contribute $100 per month to John’s rollover IRA
- Save $1000 a month (again, this is iffy right now…this will be a more specific number in a month or so)
- Read “Rich Dad, Poor Dad” and “The Millionaire Next Door” this month
Steps to setting financial goals
STEP 1: Make sure your goals are attainable. Don’t try to save $500 a month if you know there’s no way that’s going to happen. Instead, save $50. Within 6 months, you’ll have $300. At that point, maybe you can up it to $100 a month and by the end of the year you’ll have $900 in savings. Every bit adds up and you have to start somewhere.
STEP 2: Pay yourself first. Once you decide on a goal, make that happen FIRST (before paying bills, before going out to eat, before anything).
STEP 3: Continue setting goals in the short-term. Once you start saving each month, for example, start focusing on another goal. Do you want to start investing? Make it a goal to get something opened this week. And then make it a goal to contribute monthly to that new investment. John and I are constantly setting and meeting new financial goals.
John and I’s ultimate goal is to become millionaires and live off passive income streams, but it’s going to take hundreds of tiny little baby steps to get there. That’s what we’re doing now – and eventually, we will look back on all this and be so glad we took action NOW instead of waiting!
Remember, the rich invest their money and make it earn them even more money, the poor spend their money. It’s as simple as that.
What are some of your financial goals? Do you set goals in the short or long-term?
Erin @ Journey to Saving saysat
I really like breaking bigger, long-term goals up into shorter ones. It’s much easier to save X every month, as opposed to Y for the whole year. Our savings is finally set to a comfortable level, so our focus in on our student loans. We’re cutting it close every month in terms of having anything left over, though, so we can’t exactly pay extra right now. I’m hoping my income with freelancing will increase these next few months to make that possible (my goal with that is to earn over $1k/month).
That’s a great goal!! And VERY do-able!! You’ll probably be surprised at how quickly you can grow your freelance income. Best of luck!!!
Stefanie @ The Broke and Beautiful Life saysat
If you want to reach the big goals, you have discipline in the day to day and achieve the intermediary goals. It’s tough. The big goals like saving 15k sound so sexy, but skipping happy hour and dinner after a tough week, not so sexy- but that’s how big goals happen.
Exactly!!! You made such a good point – set little goals now that way you achieve the big goals!!
Thanks for the comment 🙂
Jay @ ThinkingWealthy.com saysat
You fed 4 people on $25 for an entire week? Congrats! That’s Monday for me… but then again I live alone and it’s tough to cook for one person.
LOL well if it makes you feel better we only did it once 🙂 and it was a super boring week food-wise. We basically had pasta, pizza or something easy (and unhealthy) every night!
DC @ Young Adult Money saysat
I think it’s always good to have detailed goals. I do prefer annual goals, and actually just today set two HUGE 3-year goals. I know it’s kind of ridiculous, but I definitely am following it up with a detailed “bridge” that shows how I plan to get there. I like annual goals because it gives me a longer time frame to “solve” them. I might want to save $12k this year, but it may require me to find some additional side income sources. It may even mean that I save $0 the first three months, but save more than $1k the last 9 months. In general though I agree with you that detailed goals have a higher chance of success.
Ooo you should blog about your three new goals!! I would love to read it (plus it holds you accountable lol!).
Our goals are pretty boring right now. We are maxing our retirement this year and putting away money in our health savings account. We’re also trying to earn as much as possible. That’s about it! =)
Great goals!! We are trying to earn as much as possible, too. My poor husband has been working at 4am everyday and getting home around 6pm 🙁 But we know this will pay off later (hopefully, haha).
Toni @ Debt Free Divas saysat
I could not agree more. In my corporate life we used to say S.M.A.R.T. goals. Same thing. WonderMan and I want to be successful entrepreneurs!!!! We’ve been unsuccessful, so now it’s time to experience the other side. Great post!