Financial Goals – What Do You Want Your Money To Do?

Goals are an incredibly powerful tool in achieving success in life. Unfortunately, most people would rather go to the dentist than sit down and set financial goals! It takes effort and many people find it hard to sit and focus on determining exactly what they want out of life. I would encourage you to look at goal setting like any other new exercise you begin.

It takes time to become good at, it requires deep thinking, and it involves consistent effort. As you achieve a set of goals, you establish new ones. Once it becomes a habit, it is much easier to manage going forward. When life throws you a curve, you adjust accordingly. There are countless studies that show that people who set written measurable goals accomplish much more than those who do not. It is worth the effort and you will see the benefits the more you do it.

Step One – Decide What You Want

If you do not know what you want, you really do not know what you need to achieve it. This can actually be a very exciting process since you get to use your imagination to establish a vision. The other thing is that you have probably thought about all of these things many times, but just never committed them to paper. So sit down and answer the following questions:
• What do I want out of life?
• What is my ideal situation?
• How does an ideal day look to me?
• What career appeals to me most?
• Do I want to pay off debt or invest more?
• How much money should I earn from my job?
• Do I want to save more money for retirement?

These are just a few questions to get you started. Usually once you start the process, the ideas will start flooding. I suspect that each answer you provide will lead to additional questions. Do not do this in marathon sessions either. Start with 10-15 minutes and start documenting your ideas. The important thing is to start. If the ideas are flowing, take the extra time to capture them and organize them!

Step Two – Form Your First Set of Goals

Now that you have compiled your list of ideas it is time to turn those into goals. Be specific and get down to the details. Give yourself some timelines and make sure you can measure progress along the way. Avoid the mistake of being vague.

I always like to challenge people to get more specific. I think it is important because of experience. When I worked in some larger commercial gyms, I would get flooded with new clients at the beginning of the year. Everyone was fired up about their New Years’ Resolutions and ready to take charge.

These people had really good intentions and I always commended them for coming into the gym. I really wanted to help them reach a new level of fitness. However, when I would sit down with them and I asked what they wanted to accomplish, I listened carefully.

If people came in and sounded very vague and uncommitted, it was usually a matter of time before they quit. I tried very hard to get them to write some concrete goals down on paper. If they bought into my direction, they tended to stick around and build a good routine. If they resisted, I did the best I could and hoped that they would last in the gym.

Is it a Goal or Just an Intention?

Please consider some examples I have seen in the past. “Get into shape” and “lose some weight” are not effective goals. Those are excellent intentions, but that is only a start. By setting a specific target, you have something concrete to aim for. “I am going to lose 10 pounds by March 1st” is a good goal. “I am going to lose 20 pounds in preparation for the 5K I am running on July 1st” is a good goal. You get the idea.

Our financial goals require the same attention. “My goal is to be debt free” is a good start, but make sure you get specific on how to accomplish it. “I will pay off my credit cards by December 31st” gives you a target with a deadline. “I will pay off my student loans in 3 years on December 31st” gives you a bigger target with a longer deadline. It is good to start small, but do not limit yourself either if you have big ideas!

If you want to be a millionaire by age 50, get it in writing and get your game plan together on how you will accomplish it. If you want to retire by age 50 and be able to do whatever you want, get it down in writing. It may seem like a tall order or even impossible to you right now, but a lot of successful people have done it.

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Step Three – Monitor Progress and Milestones

Regardless of how big or small your goals are, make sure they are in a form that allows you to measure your progress. You also want to create some milestones along the way. Most goals are a result of smaller achievements over a defined period of time.
If you want to lose 100 pounds, figure out what is a healthy, realistic time frame to lose 10 pounds and set your schedule accordingly. I have had some clients make drastic changes using that method. 100 pounds may have felt overwhelming at first, but 10 pounds was totally doable. Once that milestone was accomplished, they attacked the next 10 pounds. The good feelings and positive momentum kept pushing them forward.

If you want to be a millionaire and you are currently making minimum wage, you have got a lot of work to do. Of course, that is an extreme example but I want to make a point. You have to think about what steps you are willing to take. Break it down into increments – $10,000 at a time, $50,000 at a time, etc. You can adjust your expectations and timelines as needed, just make sure you keep yourself accountable along the way.

Rome Wasn’t Built in a Day

I heard a story a few years ago that I really enjoy. A gentleman was driving along in a construction area and was frustrated with the delays. He looked at an overpass along the way and saw a sign that changed his mood immediately. It said “Rome was not built in a day – if it was we would have hired their contractors.” All he could do was laugh and wait patiently in traffic.

It is a great quote and provides a smile but it drives home an important point. Improvement takes time and there will be road blocks along the way. Despite the time and effort involved, hard work and consistency pays off in the end.

Step Four – Make a Total Commitment to Your Plan

Once you set goals, it easy to justify missing your targets and settling for less than you could accomplish. Do not fall into that trap! As mentioned, set goals that are reasonable and make improvements as you need to. If temporary emergencies come up that derail your plan for a period, start up again as soon as possible.
Do not let temporary setbacks hold you back or cause you to fall into previous habits. Surround yourself with people who will hold you accountable. This is one of the biggest reasons people mention when they work with me as a trainer or a planner. They like the accountability and direction I am able to provide. Another important part of my job is to provide encouragement when they need the extra boost.

Stanford University did a very fascinating study on the psychology of social support and encouragement They studied 218 people who wanted improved fitness and divided them into 3 groups. The first group worked with a health educator who provided weekly reminders, progress updates, and encouragement. The second group did not work with a human, but received a computerized reminder call with similar inquiries. The third group got no such reminders after the beginning of the study.

Not surprisingly, the group that worked with the health educator performed the best over the 12 month study. The group that received no accountability calls did the worst. What was surprising is that the group that received the computerized reminders performed only slightly worse than the first group. Both groups who had a routine of accountability and encouragement performed much better. This shows how important it is to work with people who will push you along the way.

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