Financial Goal Setting: How to Create Meaningful Financial Goals
How Healthy are Your Finances? Part 6 of Series
Remember when you were a kid and you used to dream about being a doctor, a teacher, an astronaut flying to the moon? Then as you got older, those dreams slowly started to fade away. Responsibilities came knocking at your door and domestication became more and more part of your reality.
I think it is time to go back to the child-like state and start dreaming again. What is it you want to do with your life? What are your dreams, passions, deepest desires? Who says you cannot have the life you envision for yourself? Now more than ever, with the economy changing rapidly and opportunities galore, seize the day and create the life you dream of.
In my opinion, money is just a tool to help us create the life we want for ourselves, so what is it that you want exactly? What is most important to your happiness and future? Knowing the answers to these deep questions will help you create meaningful financial goals; goals you truly wish to achieve because they have a personal meaning to you.
When mapping out your financial future, creating goals derived from your dreams is just as critical as the saving part itself. Its great if you are saving into your 401k for retirement, but if you have no idea what you want your retirement to look like, how likely will you stay motivated to save when that really nice vacation deal comes your way? Without specifically defined goals based on authentic desires, it is very easy to use the money for immediate gratification instead of saving for the future.
As you progress through your different life stages, allocate time each year or every few months to make sure you are thinking about what you want to achieve with your money. Read my post, Team Huddles for more information on how to talk about your goals and money with your partner.
Here are some tips for creating meaningful financial goals:
Write down your top 5 dreams– Your dreams can be anything you desire, however minute or grand- such as owning your own business, traveling the world or becoming financial independent at age 55. People who write down their dreams and goals are 50% more likely to achieve them– just by writing them down! Imagine how likely you are to achieve your goals if you write them down and take action.
Make them SMART– Once you define what it is you want to achieve, turn your dreams into SMART goals- Specific, Measurable, Attainable, Relevant and Timely. For example, if your dream is to travel around the world for a year, calculate how much you will need (measurable), how long you will be saving for this goal (timely), make sure you can actually save the amount needed (attainable), figure out in which account you will save for this goal (specific), make sure it is something you actually want to do and can do at this stage in your life (relevant).
Share your goals with your friends and family– This makes your goals more real, and you never know who may be able to help you accomplish some of your goals. Also, once you share your goals, it will help those around you understand how you are spending/watching your money. So, if you have to decline going out to dinner more often because you want to save your money, they will hopefully understand why. With clear goals and spending plans, you know what you are capable of and should surround yourself with people who support you and your choices.
Take immediate action on your goals– This one is crucial. Why? Because life happens and once we have our goals written down and mapped out, reality steps back in and we tend to forget the things we need to do. Work piles up, the kids are hungry, there are other ‘more important’ matters to take care of, but this is your life! Make yourself and your dreams a true priority in your daily life. You don’t want to keep making the same list of goals each year without crossing any of them off. With long term goals, such as ones that are 10+ years away, you need to find ways to stay motivated day in and day out for the long haul. Remember, action is key, and any action is better than none.
Financially Wise Women Quick Tip:
Treat yourself to a date with your inner-self; one where you can spend a few hours just dreaming again. Maybe go to the park with a notepad and start by writing down your most personal and intimate dreams in life. You will be surprised at what happens when you schedule a little ‘me-time.’