Have you ever just felt stuck? Like there’s so much you want to accomplish in life but you just don’t know where to start? It might be time to start to set goals and accomplish those great things.
A few days ago, I had a friend call me up and say “help, I need to get my financial life in order!”
She’s recently divorced and starting from zero. Luckily, there’s no horrible debt to pay off but she just can’t seem to figure out how to balance her budget, save for retirement, and get on with her new life.
I told her the first thing she needs to do is figure out where she is right now:
- What monthly bills do you currently have?
- Rent, utilities, car payments, daycare, etc.
- Where are your discretionary funds going?
- Eating out, groceries, bars, retail therapy, weekends away?
Now, begin to think about the future. What do you want to accomplish in 10 years, 5 years, 1 year, 1 month?
Here is a step-by-step guide to getting you thinking and working towards setting and achieving your goals.
1. What do you really want? Be specific.
Instead of “I want to be able to retire someday.”
Be Specific: I want to be able to retire by the time I’m 60 with an income large enough to allow me to live in my hometown and take 3 vacations a year!
Rather than: “I want to get a good job.”
Be Specific: I want to become a traveling farm animal vet living in Texas! (My 8-year-old)
Think hard about what you really want and be as specific as possible.
Whether it’s a huge career dream in your 20s (Things to Master in your 20s), earning a higher salary in your 30s (How to Increase Your Income), or becoming self-sufficient in your 40s after a difficult divorce, think about what you truly want and be specific!
2. Write it Down: Make it Measurable
Once you have decided what you really want, write it down!
Make it measurable so that you know how far you have to go to reach it and when you have actually achieved it!
An Example:
Charlie and Gwyn want to buy a house before they have a baby. Great Goal! Now make it measurable!
The 3 bedroom homes in their neighborhood (specific size and location) cost about $300,000.
They plan to have a baby in the next 3 years.
If they want to have a 20% down payment, they will need to save $60,000.
In order to accomplish this, they will need to put away $1,666 every month, for the next 3 years.
Specific, written, and measurable!
3. Set a Deadline and Sub Deadlines
Once you have a specific, measurable goal, set a deadline to accomplish it.
If it is a very lofty goal that will take years to accomplish, set sub deadlines to keep you motivated along the way. And celebrate them!
Another Example:
Robbie is 24 and has $50,000 in student loan debt. His goal is to Pay It Off (How to Pay Off Debt) before he turns 30.
In order to do this, he will have to pay at least $695 every month, plus interest.
This is a lofty goal and 6 years is a very long time to stay motivated.
Without setting sub deadlines and mini celebrations, Robbie may become demotivated and give up on being debt-free by 30. He could always just pay the minimum amount and stretch his payments over 20 years, but that would suck and he doesn’t want that hanging over his head for that long.
So, he decides to set sub deadlines and celebrate them.
He wants to pay off $8,500 each year. (Sub Deadline) Each time he reaches that goal, he will round up his buddies and go to a baseball game.
Something big enough to look forward to but small enough it won’t set back his goal.
Or if your goal is to build a business that profits $100,000 a year in the next 2 years, set sub deadlines like
- Having your website live in 1 month
- Making your first sale in 2 months
- Writing an ebook in 6 months
- Etc
And celebrate your milestones along the way!
4. Determine Any Obstacles You May Have to Overcome
Nothing in life comes easy. You must plan and put in the work to make things happen.
While building your plan to achieve your goal, think ahead and figure out what types of obstacles might stand in your way so that you can prepare yourself to tackle them, head-on.
If you’re starting a bakery, a million things could happen
- A new bakery moves in across the street
- Your flour supplier suddenly goes out of business
- The thermometer on your oven goes out the day before Thanksgiving (No, not the butter rolls and pie!)
Paying off debt in the next 3 years could be sidetracked by:
- A new Baby being born and new child care costs being added to your budget
- Job loss or illness (How to Prepare for a Job Loss)
- Your oldest kid starting college and new tuition costs joining the rank of monthly bills
No matter what your goal is, there will be complications that will try to throw you off track.
But by thinking ahead and planning for those obstacles, you can be better prepared to deal with them and still accomplish your goals.
Any purchase or business venture will have Expected Expenses. Plan and save for them to prevent a bump in the road from crashing your entire goal.
Allow yourself to build the mentality that there will be setbacks, but they’re only setbacks. They’re not “stop signs”.
If your goal is to lose weight but you have a huge “cheat meal”, that doesn’t mean you’ll never be able to reach your goal weight, it just means, you really wanted that cake today. Get back on the train tomorrow.
Recognize the things that could throw you off track on your goals. Prepare for them and charge through.
5. Determine the Knowledge and Skills You May Need to Acquire
Whatever your goals are, there are probably things you need to learn in order to reach them, otherwise, you’d have already done it!
Some things are common sense, like spending less than you earn.
But if you’re having an issue implementing that common sense, you may need to spend time learning tips and tricks to teach yourself how to do it.
Other goals, like becoming a doctor, might need more training.
Figure out what you need to know and spend time learning the skills you need to accomplish your goals.
- Read: books, blogs, articles, anythings!
- Take Classes: schools, online, in your community
- Listen to Podcasts or watch videos
- Find a Mentor, group, or apprenticeship you can learn from
6. Determine the People Who Can Help You
If you’re looking to do something, odds are, someone else has probably done it before, or at least something similar.
Look at your goals and figure out who could possibly help you achieve them.
From teachers to friends. Mentors to business partners.
My son has a goal of mastering a back handspring by the end of summer. He has recruited the help of his gymnastics instructor to achieve this goal, as well as some of his classmates to compete with and cheer each other on.
Finding people to help you achieve your goal can come in all shapes and sizes.
Sometimes you need an actual instructor or mentor to teach you the skills of the goal.
Other times, a simple accountability partner may be the best help.
As a realtor, I know that some goals, like purchasing a house, can take a whole team. From bankers to inspectors, agents to sellers, there are a lot of people involved!
Make connections with the people you need to work with ahead of time, like getting approved for a mortgage and learning how the buying process works, before jumping in.
Think about your goals and who could help you achieve them. Then make the connections and build strong relationships to make it happen.
7. Build a Plan by Priority
Once you’ve set your specific goals, figured out what you need to know, how to accomplish it, and who can help you, it’s time to start building a plan!
What do you need to do to reach your goals?
Build a step-by-step plan, prioritizing what is most important.
Maybe your goal is to buy a 3 bedroom house at the beach and work from home 3 days a week.
That’s a great goal, but of that, what’s the most important to you?
- Living at the beach?
- Buying a house?
- The size of the house?
- Or working from home?
Maybe living at the beach is most important. What would it take to move?
- You could rent for a while while saving up to purchase
- Purchase a smaller home to start
- Be willing to make the daily drive to work for a while
Or maybe working from home is most important to you. How could you make it work?
For your ideal goal, break it down into smaller goals and begin working towards them bit by bit.
Our Goal
Mr. Bean and I want to get him retired from his 9-5 job within the next 10 years, or less, and travel with our kids.
So we have broken our goal into mini-goals by priority.
- Build our Retirement Investments to at least our Coast FI number (achieved last year!)
- We’ve been putting every extra dollar into our retirement accounts for the last 8 years
- We both got part time jobs to add to our investments, in addition to our regular monthly contributions
- Travel with our kids while they’re still living at home
- The kids have finally reached an age where they can carry their own luggage and be helpful on trips
- We have a designated travel fund and have begun to save and plan for trips
- Many of these larger trips have been put off while we worked to achieve our Coast FI number, but now that we have, we can begin using a small portion of the money we’ve been using for investments, for travel
- Build our Taxable Investments, Passive, and part-time Income to allow Mr. Bean to leave his 9-5 job
- While contributing to our retirement accounts the last few years, we have also been putting a portion towards our taxable brokerage accounts giving us investment income we could start using before 59 1/2 years old
- We have both continued to pursue our part-time jobs, ensuring we can advance and build the income, hopefully earning enough in the near future to cover all our expenses
Wrap-Up
Set your goals. Make them specific. Figure out what you need to know and who can help you. Then make a plan and take action to make it happen.
There is no reason to feel stuck in the life you have today. Change is often slow, but by planning ahead and working towards your goals, even little bit by little bit, you can build the future you want.