Who doesn’t love the start of a New Year? Endless possibilities, creating a list of goal ideas, and envisioning what the new year will bring are just a few of the reasons why I love this time of the year. For some of you, the start of the new year is just a constant reminder of the goals that you set this time last year that fell to the wayside. You face another year, yet again, tackling the same money issues that alluded you once again.
According to Forbes, 80% of New Year’s resolutions fail. That’s why this time will be different. Creating, approaching, and achieving your money goals can be achieved with the right mindset and plan. You don’t need to find the perfect time like waiting for the New year to start. You can start anytime. Do you want to pay off debt, buy a house, or just manage your money better? Whatever your goal might be, learn how to achieve smart and successful money and financial goals now!
Why Set Financial & Money Goals?
You are worth it!
Okay, so let’s just rip off the band-aid and be truthful and honest. You won’t hit any financial goals, or any goal for that matter, if you’re not intentional and set an objective to achieve. Blindly hoping that you will get better with your money is not an actual goal. First, you need to make a commitment to yourself.
So, if you’re still on the fence about why you should set your own personal money goals, remember this. You are the only one that decides how you earn, make, spend, save, and enjoy your money. That means only you, and you alone, can set your own money goals. You deserve to be less stressed and more confident about your money. You are worth it!
Money plays a major role in most aspects of your life.
Money touches every part of your life, even if you don’t care to admit it. It helps you pay for your basic necessities – food, water, shelter, and transportation. It also helps you pay for vacations, hobbies, or charitable pursuits.
Money also helps you get through whatever life has in store for you. None of us want to think about unexpected illnesses, deaths, and unexpected job loss, but nonetheless, they will come either way. If any of you have ever experienced a life emergency, you know just how important it is to have your finances in order with an emergency fund ready at your disposal.
Learning how to handle your money effectively reduces stress and allows you to focus on other personal goals. That’s why money goals should be your number one priority if you have struggled to achieve any goal in the past.
What are Money & Financial Goals?
In a nutshell, money goals can be any personal objective that helps you have a better relationship or mindset about your money. It can be as simple as learning how to live on a budget, save money, or as ambitious as retiring early. Whatever your goals might be, having financial targets will motivate you to question how you earn, spend, invest, and save your money.
So, don’t get caught up if your money goals are simple. It’s okay! If you need to figure out how to stop over-drafting your checking account or how to pay your bills on time, don’t sweat it. Everyone is at a different stage. Remember, above all else that these are your goals and your burdens to bear. No one else knows you what you need to work on, so don’t get distracted by other’s financial goals. Ignore everyone else, and get to work!
Steps to Setting Money & Financial Goals
#1 Do a brain dump of all of your money problems, goals, and ideas onto paper.
This is probably the most overlooked step that most people make, and I’ll tell you why. Sometimes, we pick the most obvious money goal like paying down debt and just go with it. After all, paying down debt is a great goal, but a good brain dump helps clarify all of your aspirations and helps you zero in on what you need to focus on. You can write a list, a flow chart, or even draw or write a journal. There is no wrong or right way to do this. Just don’t skip this step.
Basically, this brain dump will focus on purging all of your money problems, goals, and ideas swimming around in your head. Don’t be afraid or second guess yourself. Write down anything that comes to mind. Be honest. No filters and no judgment.
Face the facts and prioritize what you’ve written down from your brain dump. Chances are, you can’t achieve all of your financial goals right away. Most likely, you’ll need to tackle one before planning how to achieve the next goal.
For instance, say you want to pay down debt, learn how to budget, retire early, and buy a house. If you tried to accomplish all of these goals at the same time, you’ll most likely feel overwhelmed and not make much progress. So, take a step back, look at your list, and assess your situation. What can you tackle now that will create the most momentum in the next few months?
#2 Pick one or two goals to focus on for the next three months.
Look at your brainstorming list and prioritize. Pick at the most two goals to focus on for the next three months. By breaking down your goals into small quarterly sprints, you’ll feel less overwhelmed. It also creates a sense of urgency too.
If you’ve never stuck to a budget before, then this should be your main priority. After all, a budget is merely a spending plan that aligns your financial and money goals. Sure your ultimate goal is to pay down debt. But first, you need to understand how much you earn, spend, and pay towards bills. That’s budgeting! Your immediate goal may look like this:
Create a monthly budget and stick to it for three months.
When I first started paying down $72,000 in consumer debt, I didn’t approach my financial goals this way. My ultimate goal was to become debt-free. After I created my debt snowball, I realized that it would take four long years to pay it all off. To say I was disappointed, ashamed, and unmotivated would be an understatement. I almost gave up right then and there.
Thankfully, without knowing it, I realized that I needed to create mini-goals. My first money goal was pretty obvious. I made a pact with my hubby to create a monthly budget that we could both stick to so we could start tackling our debt. And you know what, it worked! We ended up paying off our debt in two and half-years (way ahead of our original plan) and faithfully still budget each and every month.
#3 Write down why you need to achieve your money goals.
Now, that you’ve picked one or two money goals to focus on, write down what is your big reason and motivation to achieve them. Don’t skip this step! It will help you stick to your plan when you want to give up. Your big “why” will make even your best excuse pale in comparison.
Knowing that I was paying thousands of dollars of interest quickly helped me overcome any shopping spree splurges. It just wasn’t worth it. When I wanted to give up, I would reread why I wanted to be debt-free. What I wanted so badly to splurge on lost its appeal if I had to stay in debt for another month.
#4 Envision your life as if you have already achieved your goal.
This is something that you probably have not done before. And I must admit, this was something I didn’t do when I first started on my debt-free journey, but I wish I had. My hubby and I really struggled those first few months trying to figure out what to focus on. We wasted time trying to accomplish things we thought would make a difference.
What we should have done is envisioned our life debt-free. We would have instantly known that we needed to focus on budgeting first. Cutting expenses and saving money would naturally happen while we learned to master budgeting. Here are some questions to ask yourself when you envision your life after you’ve reached your goal:
- What money habits do I practice regularly now that I’ve reached my goal? (Every day, every week, and every month)
- How do I view money and my finances? What is my relationship with money?
- List what motivates you
- What money and financial goals am I working on now?
Now, look at your answers and figure out what habits, mindset, and actions you need to start learning now. No one ever tells you that it takes time, effort, and patience to create these new habits, so don’t wait. Start now!
#5 Create SMART goals.
Now, here’s where you’ll break down your goals using the SMART method.
S = Specific goals
Set specific goals. Don’t be vague. A broad statement that you want to handle your money better is not very clear. Instead, a specific goal that you will save money for an emergency fund is specific and concrete.
M = Measurable
Figure out what is the best metric to use to measure your success. In this example, your metric might be the amount of money you want to save for your emergency fund.
A = Achievable
Create a goal that is achievable. Don’t make it so far-outreaching that you won’t be able to reach it without a miracle. You also don’t want to make it so easy that it doesn’t motivate you to create new habits.
Is your goal relevant to your big money and financial goals? Is it in line with your future money goals that you want to reach? If not, reassess your choice or figure out how to make it more relevant to your ultimate money and finance objectives.
T = Time Bound
Finally, give yourself a deadline. Setting quarterly goals due every three months are bite-sized mini-motivators. Setting annual goals sometimes tricks you into thinking that you have time to spare. Quarterly goals are manageable and won’t feel so overwhelming.
#6 Create a plan for roadblocks and obstacles.
Now, don’t be fooled into thinking that having SMART goals is all you need. Creating a plan for common roadblocks and obstacles will help you overcome them when they pop up.
Believe me, it’s easier to go through all of the ways to tackle a situation when you’re not stressed out. If you have a plan, you won’t be scared and unsure of what to do. Just pull out your plan and follow the steps.
#7 Review your progress regularly and adjust if needed.
Finally, the last and most important step is reviewing your progress regularly. Have an honest checkup with yourself daily, weekly, monthly, and at the end of each quarter.
This is where the magic happens. What is working? What are you struggling with? If you aren’t hitting your goals, you may need to reassess your goal. Maybe you need to learn a new skill you overlooked. Possibly, you need to figure out why you can’t stick to your plan. Maybe your plan is too rigid or too strict.
Sometimes, you may need to adjust your plan if it isn’t working. Why stick to a plan, just to stick to a plan? If you lose, you’re only hurting yourself.
And if you’re winning, celebrate and reward yourself! Don’t forget that the reward is not just the end goal. Enjoy the process and the small wins that get you that much closer to financial security and freedom!
Final Thoughts of How to Achieve Successful Money & Financial Goals Now!
Successful money and financial goals can be achieved with the right mindset and plan. Following these seven easy steps creates constant momentum that you can replicate each and every time. Conquer all of your money goals and achieve financial freedom now. Start with a brain dump and write down all of your money goals. Pick 1 or 2 goals that will benefit you the most in the next three months. Next, write down your “why” and how reaching this goal will improve your life. Envision your life as if you’ve reached your goals is the next step. Use all of this information now to set up SMART goals. Finally, create a plan to tackle obstacles and review your progress and adjust accordingly. You’ve just learned the methods that will help you reach your money and financial goals. Now, go and conquer them!
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Comment below and share your money and financial goals!