If you feel like you are consistently falling short of your financial goals, you are not alone. According to the Federal Reserve's Economic Well-Being of U.S. Households report, a significant share of U.S. adults live paycheck-to-paycheck and would struggle to cover even a $400 emergency expense. This means that many are accruing debt, working longer hours, and not saving for their retirements.
Does this sound like you? Like all areas of our lives, when we are flailing about with no eye on the horizon, it is easy to get lost. We can get caught up in the day-to-day of work, kids, marriage, and get off track when it comes to our financial goals.
Just like with an exercise program or diploma track, there are clear, measurable goals to accomplish and check off as we go. Our financial plan should be no different.
Taking the time to assess our needs, making projections of our track, and creating goals for your future can pay big dividends for your current quality of life and retirement. If you find it challenging to create and maintain financial goals, here are a few tips that can help.
Take Time to Decide What You Truly Want
Have you noticed that when we work toward something that we are less than enthused about, it takes us longer? We simply are not as motivated because it's something we really do not want.
A friend of mine recently started his own media company. He started about two years ago, and it has taken off. He is passionate and excited about his new endeavor, so he spent every waking moment curating his ideas and business plan. The ball started rolling quickly for him, helping him to achieve his financial goals.
He expressed regret at having spent time and money going to graduate school towards a degree in the healthcare field. It was not what he really wanted, so he never excelled or found joy in that career and wasted valuable time pursuing something he didn't want.
Think about what your financial goals genuinely are. These can involve career changes, buying a home, going back to school, saving for retirement, and so on. By taking the time to mull things over and think about what you want to accomplish, you won't waste time or money going down the wrong track. You can always discuss your goals with your financial advisor.
Narrow Down Your Goals and Tasks
I remember when I decided to begin a new exercise regimen after my first son was born. I bought an elliptical and had it put in our bedroom in a nice spot with a view out the window. And there it sat. Months went by, and our shiny new elliptical became nothing more than a clothes hanger.
I realized that I had decided I needed to start a new workout routine, but I had not determined the "what" or the "how" of the whole process. I needed a concrete plan of action.
I made a timeline of how long I wanted to stay on the machine, how many minutes, and what time of day I wanted to jump on. I told my wife to hold me accountable. Soon, I was on the elliptical for over an hour a day, getting a fantastic workout, and taking care of my health.
It became a new habit that I embraced and enjoyed, but I'm not sure I would have followed through without the specifics that I had broken down to achieve this goal. I needed to see it in concrete terms to know what it was I was reaching for.
If you take the time to outline your financial goals in precise terms, such as "I would like to have an emergency fund of $10,000" or "I want to save $50,000 annually for retirement," it can help you understand your reasoning for doing the tasks. Having the tasks broken down into smaller pieces makes things seem less daunting and thus makes us more likely not to cower away from the challenge. For longer-term objectives, consider how your goals fit into a broader retirement distribution plan.
Don't just state your goal to the universe with no plan of action. Make a detailed, specific plan of what you want to do.
Give Yourself Deadlines
If you give yourself a specific time frame to achieve your goal, you have that finish line in the distance that can help keep your motivation going. Just like a carpenter building a beautiful table, having a picture of that finished product hanging in the workspace and knowing that within a certain amount of time you can have that table can inspire and stave off the desire to procrastinate or give up when the work gets tough.
For example, if there is that special vacation you've been wanting to save up for, having some photos, making your trip itinerary, and circling the date on your calendar will give you the visual of the reward you are working so hard to achieve. It makes giving up that pricey cup of coffee to stay within your budget a bit easier knowing you'll have that experience to look forward to.
Breaking your goals down into one week or two-week digestible timelines can be helpful as well by giving you some intermittent "successes" that will keep the motivational juices flowing.
Setting goals is essential in our lives in many areas, including our financial world. Taking the time to think about what we want specifically, breaking down the tasks of how to get there, and giving ourselves a timeline to do it will pay dividends in your rate of success. It's incredible what we can achieve when we set our minds to it.
For those approaching or in retirement, aligning your goals with your retirement planning strategy ensures your savings timeline and account structure support what actually matters to you.
