We recently set a pretty big financial goal. It’s a little scary, a little exciting, and a lot “I can’t believe we are doing this”!
Goals and planning are important. A budget is a plan and we’ve talked before about how I think a budget is a key to financial success. Today I’m going to share how to set financial goals and some of the though behind our plan for the next 18 months.
How to Set Financial Goals:
Discuss the Options
Sit down and discuss big saving projects you have or if there are any loans you need to pay off.
Mortgage, loans, car funds, remodeling project, college funds, retirement fund, emergency fund, investment opportunities, and travel are all ideas to get you started.
Pick a project
We are debt free with the exception of our mortgage. We recently purchased a new to us mini van and still have a little money in a car fund that we are slowly adding to. We have a fully funded emergency fund/living expenses. We have no known major expenses coming our way. Sure, our retirement fund and kids’ college accounts could use more but we went for paying off the mortgage.
Look at the Numbers
When we knew paying off the house was a huge goal of ours I spent some time looking at the numbers, seeing how much time we had left paying off the house as is and then started seeing when we’d be done if we put all of my paychecks towards it. Talk about motivating.
Seeing the numbers and looking at dates on the calendar made it seem real and possible!
Pick a Start Date
Decide when you are going to start and just do it! Big goals are hard. You can spend a lot of time thinking about them instead of acting. That will get you nowhere. Go for it.
Know it Will Be Hard
It’s not going to be easy. It wouldn’t be a BIG GOAL if it wasn’t. Expect challenges, prepare yourself for them, know it’s not going to last forever and commit to it 100%!
Have an End
Goals are hard to keep after when the going gets tough and hard to keep momentum going if there is no end in site. You can have two types of ends:
- a time – a date in the future when you’ll be finished
- a dollar amount end
I have both in my head. I know how many months it will take to pay off our mortgage and we also see the dollar amount decrease each month.
Celebrate the Milestones
Saving up $10,000, $25,000, or $100,000 is daunting! It might seem like you’ll never get there. To help keep the end in site and the momentum going, break your goal down and celebrate the mile markers along the way. It doesn’t have to be anything big, you are on a budget after all. Have a family game night, complete with homemade ice cream, have a picnic at the park, rent a movie and pop some popcorn. Do something your family would enjoy that doesn’t cost much (or any) money.
Keep the goal in front of you! Don’t shove it in the back of your mind where you will forget it.
- Make a paper chain with one ring for every thousand dollars. When you put in $1,000, remove a chain.
- Draw in outline of whatever you are saving for or paying off and section it into parts. Each time you are a thousand dollars closer to your goal, color in a section.
Having even simple visual reminders and being able to see the progress can keep you motivated!
Plan a Party
Plan something fun that you want to do when your goal is 100% met! Go out to your favorite restaurant, take a day trip to the zoo or amusement park, buy everyone’s favorite foods at the grocery store that haven’t made the budget cut the last year. Make it fun and something to look forward to!
Don’t expect it to be easy, but with these 9 steps on how to set financial goals you can select a goals and start tackling it! We can cheer each other on. Do you have any tips for successfully setting financial goals? Any goals that you are trying to nail this year?
Linking up to these fun parties!