Knowing What you Want

Written by Joe Zhou

It’s a New Year, which is the perfect time to set your goals for the future. Even if you’ve done this before, it may be a great time to revisit them because as we all know, our ideas can change. Many people mistakenly think setting goals is too much work or it’s too overwhelming. It doesn’t have to be. Setting goals for the future helps you know what you want and then gives you an idea of how to plan for them.

Are you ready to figure out your goals for the future and to make them happen? Keep reading to find out more.

Why do you Need Goals?

You may wonder why you need to bother with making goals. Isn’t it enough to just get through life? Goals have a way of improving your life, though. They give you something to strive toward and they may even keep you going.

Setting financial goals often means making choices and even sacrifices. Not everyone wants to do that, especially when it’s unpleasant. When you have goals written on a piece of paper and a plan to achieve them, those sacrifices don’t seem so harsh. Goals give you that ‘why’ that everyone is always looking for – it’s time to look for your ‘why.’

Choose Your Goals

Now that you know why you need goals, it’s time to choose them. We suggest choosing both short-term and long-term goals. Short-term goals are those you can achieve within the next year or two. They are goals with quick payoffs – they are the goals that give you the motivation to keep going.

Long-term goals are those that are so far off in the future that they don’t seem feasible. Those are the goals that are often hard to reach. It’s hard to tell yourself not to go on that vacation this year because you need to save for retirement that is 30 years away, right? Your future self will be grateful for the sacrifice, but the current ‘you’ probably won’t be quite as happy.

Setting Short-Term Goals

Choose short-term goals that will fill you with pride. Here are a few examples:

• Get out of credit card debt
• Fund an emergency fund
• Pay for a vacation
• Save for a down payment on a house
• Save for a car

Obviously, each person has their own short-term goals that they want to achieve and that will fill them up. Choose what feels right to you – what do you want to achieve? What will make you feel like you’ve ‘made it’ financially?

Setting Long-term Goals

Long-term goals typically take at least five years or more to come to fruition. A few examples include:

• Saving for retirement
• Paying off the house
• Saving for college
• Becoming debt-free

These goals take time to achieve. They don’t happen overnight and they will likely require some type of sacrifice today and you won’t see the reward for many years ahead.

Planning for Your Goals

Once you create your goals, it’s time to figure out how to make them a reality. Here are a few steps:

• Figure out what it will take to reach your goals. How much do you need to save each week or month? If it’s a long-term goal, figure out how much you have available to put toward that goal while you work on other shorter-term goals. It’s a fine balance between meeting your short-term goals while making sure you fund the longer-term goals too.

• Pay yourself first always. Don’t make the mistake of saving after you spend. Automate your savings. Have the money pulled right from your paycheck and placed into an account that you won’t touch. Let the savings grow and watch your goals become reality. You can even have more than one savings account – one for each goal.

• Check yourself often. Don’t assume you are reaching your goals – know that you are. Look at your progress as often as you need. Some people like to check monthly, while others need more frequent motivation. They need more frequent reasons to keep going. Set a schedule to check your progress often. You may find that you need to make changes along the way and that’s okay.

• Be flexible in your budgeting. Don’t beat yourself up if you slip up and spend when you should have saved. Give yourself some grace and then jump right back into it. If you beat yourself up, you’ll feel like all is lost and you’ll just stop. That won’t help anything. If there is a month or two that you can’t make it happen, then don’t. Pick up the pieces when you can and start again.

• Set milestones and reward yourself. If your goals are rather lofty, set milestones that you feel are important. When you hit the first milestone – celebrate. Find ways to reward yourself that make you feel good and motivated enough to keep going.

In some cases, you may even have to set personal goals to reach your financial goals. For example, do you want to increase your income? Maybe you want to get a big promotion or you’ve always dreamt of owning your own business. These goals feed into your financial goals as they can fuel your success in both areas. If your financial goals seem too far fetched, make them a reality by increasing your income, whether it means training for a new job, going back to college, or starting side gigs – do what it takes.

Everyone can achieve goals, but first, you have to know what you want. It takes a little soul searching. You need to ask yourself what will make you happy today and in the future? If you’re married, include your spouse in on the discussion and planning. It’s important that together you come up with plans that are attainable and that please both of you. Then you can put a plan in motion that fuels both of your desires, helping you achieve your financial goals.

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