The Tao of Setting Concrete Financial Goals

Share Button

When I was first recovering from financial disaster, one of my biggest challenges was convincing myself to actually do the things I knew I needed to do. I would think to myself, “I want to save money,” but when push came to shove, it was so easy to not save money. I’m willing to bet that you’ve felt this exact same way some time or another.

The big difference, and one that I hit on time and time again, was that I began to set very concrete and clear financial goals. If you read this site regularly, you’ll know that I mention my goals over and over again, from my monthly financial summaries (where I set very clear savings and debt reduction goals for the coming month) to discussing my upcoming plans down to the dollar.

Why do this? When you sit down and say “I want to save,” there’s no plan in place to do it. What do I do now if I want to meet this goal? What do I do when I’m standing in a bookstore with a book in my hand to meet this goal?

Here’s how you can turn a vague notion of “saving money” or “investing” into something tangible and very clear to follow.

Set a timeframe. Although many financial goals are “big,” it’s almost always better to set a shorter timeframe, or else set very clear and discrete milestones towards a larger goal. For me, I like setting monthly goals – it’s a short enough timeframe that I can see the end of the tunnel very clearly at all times.

Make the goal attainable. Ask yourself if this goal is really possible if you work for it. If you don’t spend extra money this month at all, would you make the goal? If the answer is no, then lower the goal so that it is attainable with some work.

Make it valuable. What values in your life does this goal represent? Why are you saving this money, or paying down this debt? Is it for your child’s future? For me, I use my son as motivation, but for others this may not be the case. Do you want a home of your own? Do you want to retire early? What larger life values is this financial move tied to? What do you see when you close your eyes, and how does this financial goal really connect to that?

Set reminders of your goal. One method that is effective for me is printing out images and phrases related to this goal and putting them in lots of places where I’ll see it over and over again. I wrap these goals around my credit card. I tape the goals to the dashboard of my truck.

Associate your individual financial moves with this goal. If you have a discrete goal that’s attainable and you’re keeping it fresh in your mind, then whenever you make a financial move, ask yourself if that move is in line with that goal. This is the real key here – make it clear to yourself that when you make such a move, you’re actually hindering your progress towards this goal.

Share Button
The Best Bank Rates
Loading Disqus Comments ...
Loading Facebook Comments ...

3 thoughts on “The Tao of Setting Concrete Financial Goals

  1. I really struggle with this, as I don’t have any long-term goals other than to not retire as a pauper. I have set some great targets for this year in terms of contributions to investments.

    The only other target that I have is to donate a certain amount of money to charity this year, this is related to my one of my personal values, but not to an overall goal or objective.

    Maybe when I finally manage to purchase my house I’ll have some more ideas.

  2. I think David Bach makes some solid points in step 2 of Smart Couples. Here are the simple dollars take :

    “http://www.thesimpledollar.com/2007/01/02/smart-couples-finish-rich-steps-1-3/”

    I think it is important to figure out why you want to get out of debt. It makes it easier to realize that when you forgo some impulse buy, you are getting closer to not just getting out of debt fullfiling certain dreams and values in your life.

  3. I especially love how you wrap your goal reminders around your credit card. It’s brilliabt and a lot more practical than freezing your card in an ice block!

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>