Christmas time has come and gone and that means that New Years is right around the corner. This is usually the time of year that I plug my ears and cover my eyes because of the overwhelming talk of resolutions. Somehow, every single resolution that someone comes up with has to do with either one’s health or finances. Maybe it’s just me, but I hate hearing about people’s resolutions that they are not going to stick with after the first couple weeks of the new year.
Despite my long-standing reluctance to talk about resolutions, in the past few years I have come to realize the importance of goals. I learned the importance of goals when I signed up for my first 5K two and a half years ago. While I had previously hated running (and still do), I soon found myself waking up an extra hour early to go for a 3 mile run. I found the goal of running a race a HUGE motivation in getting me in shape. While I wish I could exercise just for the sake of staying healthy, I needed the extra motivation. It was only a year later that I learned the benefit of financial goals.
How Financial Goals Helped Me
A year and a half ago, I wrote down goals for my finances for the first time ever. Previously I had always been pretty smart with my money but never had I taken time to write out tangible goals. I started with just a few, including maxing out my Roth IRA among a few other things. They were big enough to stretch me, but small enough so they were still within my reach.
I discovered that these financial goals stayed on my mind throughout the next year. It wasn’t something that I established and forgot about it. It may be just me, but when I set goals, I do so with a serious effort. Thus, when it came to a point where I had a few extra dollars, I was forced to ask myself what I should do with them. Should I put this money towards accomplishing my goals? Or should I throw it away? Inevitably, I decided to put money towards my goals more often than not because I knew that pushing off my goals would make it more difficult later.
How to Set Goals that You Will Keep
Since it is that time of year, it might be a great time to motivate yourself to be intention with your money. If you want to set goals that you will actually accomplish in 2013, here are several steps to get you there.
- Assess Your Excess Money – The first thing you need to do before setting goals is understand how much money you will have above and beyond your mandatory expenses (i.e. rent, insurance, other bills). Once you come up with this number, you can have a realistic understanding of what you can accomplish.
- Don’t Expect Perfection – After you find out what you have to use, lower your goal by a small amount. No one can save EVERY single dollar. Be reasonable with yourself.
- Push Yourself – One the other hand, don’t cheat yourself by setting goals that you know will be easy to accomplish. You’re doing yourself a huge injustice when you do this.
- Make Them Easy to Track/Remember – Another great way to accomplish your goals is to keep them on your mind. It’s hard to do this if they are difficult to remember. For example, you may set a goal of investing $14.50 each day. This is not going to be easy to track of remember. Instead, round it to a number for each month: Invest $450 each month.
Accomplishing your financial goals starts with the way in which you set your goals. After getting an accurate picture of your finances, find a balance between setting goals that would require perfection and setting goals that require no work on your behalf.
Readers, what do you to do accomplish your financial goals?
This post was written by Corey, a staff writer from 20’s Finances.
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.