This is not going to be a “how to” blog. This is more of a “get you to think” blog. We discuss financial goals planning quite a bit with our clients. What we have noticed, is more often than not, most people have not thought about their financial goals. And worse yet, have not put pen to paper on their financial goals. Believe it or not, this is a hard topic. Why, because there are no correct answers and it puts us in a very vulnerable state.
Start pondering your financial goals.
Right now, if I asked you what is your purpose? What do you want to be remembered for? What are your financial goals? You’d be speechless, right? (Don’t worry so were we when we started out). It is a mind boggling thought and could take years to truly understand what that is. And then with the blink of an eye your perspective can change and that purpose or goal no longer serves you.
Let’s say your financial goal or your purpose is to work your way up to CEO of a company. It gives you immense joy thinking about running a company. The CEO salary helps to fund your financial goal of purchasing a $3 million dollar mansion with an outdoor oasis. Becoming CEO takes many years of hard work. Let’s say during year 6 of working towards CEO, you are diagnosed with a life changing medical condition. Just like that, with a blink of an eye your purpose and financial goals change. You no longer want the stress of the CEO role. And the $3 million dollar mansion does not align with your current needs. You completely shift your goals to find a job that pays substantially less. With this shift, it gives you flexibility to spend more time doing the things that are more purposeful to you.
As you can see from this fake scenario-purpose and financial goal setting is fluid. They most likely will change multiple times in your life. And that is ok. We help our clients dream, and dream bigger. And then we help when those dreams change we help them ponder and dream again.
Put your financial goals on paper.
Even with knowing there will be changes to your purpose, dreams, and financial goals, don’t be afraid to write them down. One of our families favorite activities is after the first of the year looking back at our goals. We start the year wrigint down our 6 month, 1 year, 3 year, and 5 year goals. At the end of the year or start of the new we go through and read each one. If we met it we cross it out and discuss how we achieved our goal. If we did not, we decide if it still does or does not align with our purpose and financial goals. Try this activity and you will be surprised how many goals you had forgotten about, yet achieved. It’s your subconscious doing the work!
The stages.
When you look at your financial goals, think of multiple stages. We like to have 6 month targets, 12 month targets, as well as 3, 5, and 10 year targets. That’s a lot! We get it. This takes practice so get your pen and paper out and start thinking of a few. We bet you’ll think of a few more throughout the weeks to come.
Please don’t skip the short goals! If you only write down your 5, 10 year goals you may start to feel a little defeated as you look back on them. It is too easy to give up when you are starting to feel defeated or have the “it is impossible” attitude. So the shorter goals give you the “heck yeah!” excitement along the way.
If you really want to get crafty you can take a 10 year goal and break it down into smaller chunks. Going back to the $3 million mansion example; you may have as a small 6 month chunk to start an account specific to the mansion and set up monthly savings towards that goal. Then your 3 year goal may be to have saved $750k in that account. Your five year goal may be to have saved $1.5 million in that account. And so forth. This helps you stay excited and aligned with what you want to achieve long term. If you want ideas on where to save extra cash check out our blog-Where Should I Save Extra Money?
Write them down.
You HAVE to write them down. Life is busy and there are one thousand other things at any given moment that will steal your time and attention. If those thoughts only live in your head, your head will forget them and years will go by without progress. We recommend putting the target dates on your calendar. When that date arrives it’s fun to see if you’ve accomplished a few of the goals and also it’s fun to laugh at the ones where you are like, “what was I thinking”.
Goals are written, now what?
Find joy.
Find joy in living your life and adjusting daily habits to help achieve goals. Or find joy in adjusting your goals to keep certain daily habits that take away from your goals. It’s too easy to say I’m going to save every penny for retirement and then wake up one day in retirement and wish you would have enjoyed your years prior a little more. We want you to find happiness in living for today while knowing you also have a roadmap to get where you want later on in life as well.
It’s ok to change.
Once you have your goals written down, don’t be surprised if all of a sudden your mind shifts and things that you thought brought you joy no longer do. Going back to the mansion example again. Let’s say you spend $100 a week on lunches. You mindlessly spend it everyday until one day you are eating that delicious sandwich that cost $15 and are dreaming of your mansion. Quick math-buy lunch 52 weeks out of the year times $100 a week and you spend roughly $5,200 a year! You think about it and realize ok, $5,200 a year isn’t going to move the needle a ton but every penny counts. So you decide to eat out every other week instead and are able to save the extra into your mansion account. The funny thing is, you will probably find more joy in eating out less often, so it’s a win-win!
Lean on us.
It’s not easy to achieve your goals alone. Lean on financial advisors who care, like us, to help craft roadmaps to achieve your personal goals. Do not let fear of failing hold you back from achieving a more purposeful life!
Ps. When we say dream big, we don’t mean it has to be something that costs a lot or something someone else would find as big. We just mean step out of your comfort zone and think bigger than today.