Achieving Financial Goals

At February 21st, while the year is still young… the time is perfect for reviewing or setting goals for this year and the years and months to come. No pressure. The holidays are in the past and the deadline for filing 2019 taxes is still a bit in the distance – for now!

At this somewhat perfect time of the year, goal setting can pay off in a big way toward achieving those goals. Often goal setting is difficult to start with a blank sheet of paper so here are a few tidbits to create momentum:

green palm trees and white gazebo
Setting financial goals is difficult, so start by thinking in terms of categories: Work, Fun, Family.

  • START WITH UNDERSTANDING HOW MUCH YOU SPEND TODAY. This is a loaded question but simply identifying the “big nuts” of spending – the obvious mortgage/rent, insurance, car expenses, groceries, eating out, cable & internet, clothes and entertainment. Know these – and then round UP. Bang! You already have identified more than most people are willing to admit.
  • Then start thinking in terms of categories: work, fun, family. Tackling the financial side comes after identifying these 3 categories (and more).

As for Work,

  • Are you in the city where you want to be?
  • How much are you making today (after taxes)?
  • Do you need or want to get a higher educational degree to progress beyond where you are now? What would that cost? How can you finance it or get your employer to pay for it?
  • Do you want to start your own business? How much would that take to start? Have you identified a potential business partner?

As for Fun and Family,

  • How often would you like to travel? Emphasis on “like to.” This is simply goal setting; start with what you want or dream about, then see about trying to make it happen.
  • How much have you spent on travel in the past several years? Use this as a benchmark and adjust up or down, for the future.
  • How much do you spend on gifts for family and friends? Do you wish it were more? Take a look at just the most recent year and how much you spent on gifts.

As for the Financial side,

  • How much do you have saved TODAY in an emergency or rainy-day fund? Is it enough for 6-9 months of expenses?
  • Separately, how much do you have saved in a “slush fund” (different from emergency fund) for fun or travel or… whatever?
  • How much do you currently save monthly for retirement? Whether retirement is in the near future or 30+ years from now. What is the current balance of your various retirement accounts?
  • Visualize 3, 5, 10 years from today. What does that look like? Here is how you can get to this visualization –
  • Based on what you spend today (key point from above) what items do you think you will spend your money on in future years? New things? Some of the same things? What will move up in importance and preference? (Forget about inflation for now; in a future exercise inflation will matter more.)
  • Interest rates and investment return. Do you know how much your investments yielded the past several years?
  • Taxes. Do you know how much you pay in taxes each year? Taxes can determine what types of investments make sense for your future.

Research says that there is not enough conversation around achieving financial goals. Part of the reason may be that setting realistic financial goals is often so difficult! Several of the points above may seem obvious. But actually, sitting down – in a low-pressure environment – and thinking through these simple points while taking notes can go a long way to creating needed momentum. Then, adding advice – investment and tax advice – to the equation can make achieving goals a reality.


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