I am a huge proponent of setting financial goals. A well-considered financial goal not only gives you direction toward some of the biggest things you want to achieve in life, but is easily broken down into steps that you can achieve today – and I do mean literally today.
The big problem with this kind of big goal setting is that the bigger and longer-term the goal, the more likely it is that your life will change in some significant way before you reach that goal.
Sometimes those changes are good changes. Those kinds of changes can accelerate you toward your current goal quickly (like a windfall) or even cause you to consider an even stronger goal (like a major career advancement or change).
Others are simply life changes that make your current goal seem irrelevant, like getting married or having children or simply reconsidering your life priorities.
Then there are the changes that cause a downward shift in your income level or add major expenses to your life. Perhaps you get fired and fall out of your career path. Maybe a loved one gets very ill and you take on the burden of caring for that loved one. It could just be a long series of smaller unfortunate events.
Whatever the case, sometimes our big goals drift from audacious but possible into the “impossible without an outside miracle” territory. You’re just not going to make it to the goal, no matter how much you tweak the plan.
It can feel a lot like failure, and that sense of failure can easily make you want to give up on long term planning entirely. Your dream of retiring early now just looks like normal retirement (if you’re lucky). Your dream of paying for your daughter’s college education just went up in smoke. Why plan for anything if this is what happens?
The important thing to remember is that a worthwhile goal isn’t so much about the destination, but about the changes you make to yourself along the journey’s path and the improved financial stability that almost every goal provides all throughout the journey.
Let’s say your big goal was to save for your daughter’s college education. Suddenly, when she’s thirteen, things change. Not only are you unable to save much for that goal any more, you have to dip into it to keep a roof over her head.
It seems like a disaster, right? But consider these things.
First, what would your situation be like if you didn’t have that money to dip into at all? Wouldn’t the impact on your daughter’s life be far worse if that “college savings” hadn’t been there to begin with? Sure, you might not be using it for college, but you’re using it for something of value.
Second, how big would your lifestyle changes be if you weren’t already living below your means when you were putting aside money for college? In order to save $100 a month for college (or whatever it is you’re saving), you had to be living on $100 a month less than you could have been living on. This means that your lifestyle adjustment is actually easier than it would have been without your big financial goal.
Third, even with the changes, you likely have some progress toward your goal that you can either retain or redirect toward a new goal. Again, maybe you were able to save $10,000 for your daughter’s education but needed to tap $5,000 of it. You still have $5,000 put away toward your daughter’s education, which is a pretty nice head start for her.
Finally, you know that you can set a big goal and make progress towards it. You aimed for a goal and you were able to make lifestyle changes to reach toward that goal. You know that you have it within you to do those things, even if unexpected changes caused you to no longer be able to achieve the goal as you envisioned it.
This is not the end of the line for achieving big things in life. You know you can make progress toward big goals in life, and you know that progress toward big goals can be helpful even if the big goal is now out of reach. Rather than giving up, it’s just time for some reassessment.
You can start by sitting down and considering what things are really important to you going forward. The big goal you were aiming for is now out of reach, but that doesn’t mean that it was the only thing important to you in your life. There may be other things to aim for that are still within your grasp.
You had a dream of paying for your daughter’s education and now that seems out of reach, but perhaps you can at least pay for all of her textbooks and buy her a really good laptop when she goes to school. You can do that by simply aiming to not touch her college savings again and contributing a much smaller monthly amount (or nothing at all). What do you need to do in your life to enable a $10 a month contribution? What do you need to do to ensure you never have to touch it again? Maybe a big emergency fund might help you avoid that.
Maybe instead you had a dream of retiring early, but now that’s not going to happen. What can you do instead? Maybe you can simply aim for a normal retirement with some money in the bank that helps make your retirement richer than just what Social Security can provide. Maybe you can still retire a bit early, just not quite as early as before.
You might find that the changes in your life point you to an entirely different goal. Maybe now you want to ensure lifelong care for a loved one who suffered a devastating injury. Make that your central goal. Or, maybe you are now focused on providing care for your baby rather than retiring at age 43. Make that your central goal.
Another key thing to remember is that the skills and often the resources that you built up in pursuit of your previous goal will apply to your new goal as well.
Self-restraint? It was useful then and it’s useful now.
Smart shopping habits? It was useful then and it’s useful now.
Automating your savings for a big goal? It was useful then and it’s useful now.
Breaking down big goals into smaller and smaller pieces until they’re easily achievable in the next day or two? It was useful then and it’s useful now.
Money in retirement savings or emergency funds? They were useful then and they’re useful now.
You still have the tools, even if the old goal isn’t a great fit any more.
So define a new big, audacious goal for yourself. It might be similar to your old one but a bit smaller, or it might be something else new entirely.
Then, do as you did before. Break it down into smaller pieces until you’ve got things you can be doing in the next few days. Spend less. Automate your savings. Make good spending choices. In other words, do many of the things you were doing that helped you achieve your previous goal.
A final note: the biggest enemy when a goal falls apart is simply being disheartened. It’s easy to feel as though goals are pointless (and thus working toward them is pointless) when you watch a big goal fall apart due to things outside your control.
Here’s the truth: life always hands us bad events. We are always going to be hit with unexpected events, and many of them are going to be unfortunate ones. We can’t control those unfortunate events; all we can really do is control our response to them.
Having a goal or a “system” in place is simply a guidance tool to help you progress toward a better life than you would have if you chose to do nothing and follow the path of least resistance in life. The best response to an unfortunate event isn’t to knock down all of those goals and systems; rather, just accept that life sometimes hands you a less than desirable hand and play it with the tools that you have. You know how to set goals. You know how to break them down into actionable elements. You know how to exercise self-control and self-restraint. You can learn what specifics you need to know about the new goal you have in mind.
It’s progress toward a better life, same as it always was. Your situation might be a little worse, but you’re still working toward something better. To do otherwise merely ensures a worse outcome.