The new year always makes us feel like we need to set goals, dig into a new resolution, or make drastic changes…in one day. I don’t know about you, but I am not completely inspired by cutting anything cold turkey. While I have had success in the past with a diet change such as Whole 30, it was never anything that I could do permanently because it felt sooooo restrictive. The reality is that we do need to set realistic and attainable goals, especially financial goals. There is a better way to go about it than setting a bland New Years resolution.
First, set your goal
For some reason, money goals seem to be put on the back burner. I am an open book about finances and therefore I tend to talk money with a lot of people. One common thing that I find with a lot of people is that they don’t truly have a money goal set. They are living for the next day and next pay check. That is no way to live.
You apparently don’t want to live that way either because you are reading this post. So why don’t you dig into setting your financial goals. What do you want your bank account to look like at the end of this year? How about your debt? Are you looking to take a trip at the end of the year or make a big purchase?
Take inventory of what emotions you have right now surrounding money. Are you fearful, content, hopeful, discouraged? What emotions do you want to feel surrounding money at the end of this year?
Write all of this down on a sheet of paper. Be sure to write out SMART goals so that you know they are reasonable goals. You will want to have this somewhere that you can look back on it frequently so don’t lose it!
One of the first assignments that I give to my budget coaching clients is to figure out their long term money goals. Short term money goals are easy enough, “I want to buy a house”, “I want to be debt free”, “I want to pay for the delivery of my baby in cash”. The long term money goals are a bit trickier. These will probably change over the course of your life. One of my goals about 10 years ago was that I wanted a BMW. Now, I am a happy owner of a Subaru (and will never turn away since they are coming out with a van-like vehicle soon 😆 ). Goals change because we change and the economy changes. We want some kind of grander focus though so that is why we do this.
Think long term; 15 years, 30 years, 50 years. What do you want your life to be like? Do you want to retire early? What age? Do you want millions in retirement? How many millions? Do you want a boat, a farm, a paid for house? These are big goals. This is not something that you will get to quickly, but the foundation that you lay today leads you to success with these goals. So get on it! Dream big!
Break down your goal
Your yearly goal will probably seem a bit out of reach if you are just looking at the big picture. In order for your goal to feel attainable, you will need to break it down into smaller chunks. This will be broken down into monthly goals. The easiest way to do this is to take your goal and divide it by 12. For example, if you have a goal of paying off $12,000 in debt by the end of 2018, then you will divide 12,000 by 12 to equal $1000. That is the amount that you will be paying towards debt each month.
You can further break down your goals to weekly goals if you desire. It is not necessary, but I understand that some people want to get really visual. This may be helpful for those that get paid weekly or get an irregular paycheck.
Work your budget
Now that you have a big money goal written down, you need to ensure that it is written into your budget. Create your budget for your home using my budgeting tutorials. Work your budget to fit in your money goal. Some things may need to be trimmed in your budget in order to reach this goal. That is okay. Trim the fat and throw it all to the goal.
If you are brand new to a budget, do not be surprised if you do not attain your budget goals that first month. Maybe even your second month will be tough. Starting a budget, learning to track all of your expenses, and cutting back when you need to are not super easy tasks. Take this one step at a time. It takes about 3 months to really get into a good groove with budgeting.
Setting goals for your health, life, and happiness are important, but don’t disregard your finances. Having money goals can make you feel like you have more clarity and direction than ever before. It will carry over in so many aspects of your life. Set your goals for this year, then dream big, break down that year long goal, and work it into your budget.
If you are interested in working with me 1:1 for budget coaching, fill out this form and I will be in touch.
What is your financial goal for the year? Do you have one?