Updated on 01.31.07

31 Days To Fix Your Finances, Day 3: Create A Plan For Each Goal

Trent Hamm

The Simple Dollar offers a month-long plan for fixing your finances. All you need is an open mind and an hour each day.

Yesterday, we made up a list of ten goals that derive directly from our values. Now (and for some of you, finally), we start talking a little bit about numbers.

Let’s get right down to business. Take ten sheets of paper and at the top of each sheet, write each goal you defined yesterday. On each of these sheets, you’re going to define some specific milestones for each of your goals.

For each of the short term goals, I want you to define five specific actions:
I will do this in the next three days.
I will do this in the next week.
I will do this every week.
I will do this in the next month.
I will do this in the next six months.

Some of these will be information gathering and have no cost. Others will actually require some investment, usually the one that happens every week.

For example, yesterday I mentioned that one of my short term goals is doubling the value of my son’s 529 college savings plan in the next year. Here’s what my five specific actions look like:

In the next three days, I will get the balance of my son’s 529 account, along with the data on the annual returns of each of the investment options in the plan.
In the next week, I will determine how much I need to invest in the coming year to double the account balance and also estimate what the return for the coming year might be.
Every week, I will invest 2% of what I calculate is needed to double the balance in the coming year.
In the next month, I will evaluate all of the different funds available for my son’s 529 and choose a fund that I feel is the best match for him.
In six months, I will check in on the account and see how he’s doing for the year, see how the various funds are doing for the year, and reconsider my investment choices.

Generally, the model outlined above works well: gather information in the next three days, plan a baseline amount you’ll need in the next week, save an appropriate amount every week, investigate the details in the next month, and review things in six months. If you do this, you’ll almost always meet your annual goal.

Now, for each of the long term goals, I want you to define five specific actions:
I will do this in the next week.
I will do this in the next month.
I will do this every month.
I will do this in the next year.
I will do this in three years.

Some of these will be information gathering and have no cost. Others will actually require some investment, usually the one that happens every month.

For example, yesterday I mentioned that one of my long term goals is completely owning a wonderful house in twenty five years. Here’s what my five specific actions look like:

In the next week, I will gather information a selection of potential houses that reflect what I plan to buy immediately and what I plan to buy in fifteen years.
In the next month, I will calculate how much I will have to spend per month on mortgage, insurance, and taxes on the lower-end house, and also calculate how much the nice house will cost in fifteen years.
Each month, I will save 25% of a mortgage payment for helping me get ahead on payments when I purchase the first home. This will enable me to “trade up” more effectively when the time comes.
In the next year, I will buy a home that is in the lower house bracket and switch the extra 25% from a savings account to a direct payment on the mortgage.
In three years, I will sit down and re-evaluate what my “dream home” is like and refactor my plan accordingly.

By doing this, I break down something that seems far-off (a beautiful big house to retire in and for my children and grandchildren to enjoy) into smaller pieces that I can do right now. I also find it useful to find an image that captures a long-term goal and place it in a place that I’ll see regularly. This way, the end goal is always in sight; it’s a constant visual reminder of where I need to go.

Now that you’ve defined these plans, you have specific things that you’re saving for and spending your money on that are in line with your values and goals. Whenever you go to spend money, pause for a second and think about your values, goals, and plans, and ask yourself if that money expenditure is really helping you reach your goals or is really reflecting your values.

You should strongly consider making up a schedule that combines all of your plans together. What will you do in the next week? What will you do every week? What will you do in the next month? What will you do every month? A schedule that keeps you following your plans will help with this.

One week from now, you should have some numbers that will show you what you need to be doing to reach your goals. The amounts might trouble you, but don’t worry. In one week, we’ll take these numbers and use some techniques to carefully evaluate what they really mean – and how you can make them count for more than you think.

Before I did this exercise, I often found that, even though I often realized it wasn’t a good idea to spend, I would still spend money anyway. Why? I didn’t have any sort of concrete plan for what to do with my money, especially not one that was larger than saving for a new gadget or toy. Now, whenever I’m tempted to spend money in a frivolous way, I think about what’s important to me, and it directly connects to a plan for spending my money.

Tomorrow, we’ll start looking at your money.

Ready? Let’s continue on to the next day.

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  1. bob says:

    this is a fantastic series. i’m just catching up, and plan to be through it by end of february. here’s a tip: i discovered gubb.net, a site for lists, and it’s been a great help for this step, since lists can be copied, color-coded (blue for long-term goals, green for short-term goals), and due-dated.

    thanks again.

  2. Melanie says:

    I also thank you for the series. I’m trying to get a better handle on my finances and this series is really helping. Setting goals and making plans seems to be the piece that I’ve been missing. I’ve cut expenses and started using a budget so that I save every month, but being more clear about what I’m saving FOR makes it all a little easier.

    And Bob, thanks for the tip about gubb.net. All these lists were getting a little unwieldy!

  3. Trent Hamm Trent says:

    I’d also like to mention Remember the Milk for list management; it’s what I use.

  4. rob in Madrid says:

    I did the values and long term goals but I haven’t done this step because I can’t work on some of my long term goals, for example buying a house because I first need to get some cash in the account than pay off some credit cards than I can start thinking serious about buying a house. As well some of my values (such as Fun Excitement adventure) don’t really give them selves well to setting goals.

  5. Elizabeth says:

    “As well, some of my values (such as Fun Excitement adventure) don’t really give them selves well to setting goals.”

    Rob, I thought the same thing when I began this exercise, so I began by doing two things for my “Fun/Pleasure/Enjoyment” goals:

    1. Made a list on a blank sheet of paper of all the hobbies and activities I really enjoy, want to learn more about, places I would like to visit, etc.

    2. I asked about a dozen people what their 25 year goal would be for “Fun,” and I found some remarkable data. Most people don’t think past 5 or 10 years (from my age group–the twenty somethings, all the way to my parents age group), but in a 25 year context, you really think about what motivates your “free time” and how you spend the hours in the day for yourself and enrichment.

    Lastly, after I made the list and asked around, I noticed that for me, part of this value of “Fun/Pleasure/Enjoyment” includes “Excellence.” Once I hit on that one word, the 25 year time frame became LIBERATING! In 25 years, I could really learn to excel at something, imagine that!

    I went back to my list and saw that I enjoy: travel, mountaineering, cooking, languages, learning new cultures, and reading. With this information I could make my 25 year goal: “In 25 years I would like to choose 3-4 countries or regions to become an expert in language, type of cuisine, a cultural activity, history, and current events. Each study would conclude with a month long sebatical to visit the country/region and climb a mountain there.”

    This goal now governs ALL my free time. While I haven’t quite figured out how to include others (God, Family) into this goal, I’m excited to include my love ones in this pursuit.

    Now, everytime I pick up a newspaper, a book, go to the library, look up a new recipe, sign up for a language learning podcast, I’m excited to think to myself: “maybe this book or this recipe will reveal my NEXT 5 year adventure in travel through excellence!”

    Lastly, my one year “Fun/Exellence” goal is to choose a country and enroll in a course associated with the first thing that I’d like to learn about that country. I’m thinking either Russia or Tanzania. Russia, due to my heritage, or Tanzania because I’m eager to climb Mount Kilimanjaro.

    Happy Living!

  6. Dave says:


    I think you got your short term goals right there.

    In the next tree days, I will find the balances and percentage rates of all my accounts.

    In the next week, I will call the credit card companies and negotiate better rates. I will also set up an automatic deposit from checking to savings, even if it’s one dollar a month. I will also set a weekly budget for my ‘wants’, assuming all my needs are already taken care of.

    Every week, I will take the money from my budget that I haven’t spent, and put it in savings.

    In the next month, using the money I’ve put aside from my weekly budget, I will significantly pay down one of my credit cards.

    In the next six months, I will either have six of my credit cards paid down, or I will have money in the bank.


  7. Sally says:

    I love this!!! The best thing is that many of my goals don’t require money, or very little.

    For my family goal, I want to design a house that will be good for my kids and grand-kids to come back to for holidays and family reunions. I already have graph paper and pencils. What I need are a few ideas.

    I set a goal to spend some time at the “Parade of Homes” looking at some of the biggest, fanciest houses in my area. My daughter has to go for an interior design class so we will have fun together :D

    I think the tickets are $10 and I’ll take pictures of every good idea I find. My goal is more steered toward “big” rather than “fancy” but at the moment I don’t even know what is available.

    I designed the house we built 15 years ago and still live in, but the kitchen was just a blank spot in the middle of the floor plan. Luckily we found used cabinets that fit in our blank spot and saved us close to $7000.

    This time I want to design the perfect large group kitchen. :D And a bigger family room would be nice too.

  8. Rich Lykyu says:

    Great post, I currently setting some personal finance goals and this post hits home. I hope to be able to achieve the little stpes to reach each milestone.

  9. Jessica says:

    Great stuff! Day 3 is out the way. This was not an easy task, but it does put everything in perspective which helped me realized the amount of planning I have to do in order to achieve my goals. No more space for day dreaming, only actions count!
    i am glad I have done this and I am now looking forward to delve further into the exercise and see the results.

    Thanks again

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