Welcome to yet another New Year! There’s so much on the horizon for you and I know you have so many goals and aspirations. You’re going to get fit, you’re going to travel more, you’re going to see your friends more, you’re even going to learn to cook and actually make some responsible financial goals. Yeah, we’ve all heard it before. Everyone is hopeful and ambitious at the start of a new year. It’s just something about the year finally changing, that makes us hopeful that we can change too.
But not to fret, because I am here to help turn those goals into reality for you. Because 2019 really is going to be a kickass year (if anyone even says kickass anymore). Now, I’d love to talk fitness (not really) and relationship advice (also not really), but this is a money blog and we’re here to talk money.
But this year is going to be different, because we want to help you set and achieve your 2019 goals. We know how it goes, we always have the dream but rarely take all the right steps to get there. And that’s okay! Everyone loves the big picture, the end goal. But the planning and the tracking rarely seems like a good time.
So, we’ll take it from the top and walk you through how to set financial goals and how to make them truly happen. Whether you’re the super-organized-planner-for-everything kind, the disorganized-combobble-of-things-and-can’t-be-exactly-sure-where-you-left-your-wallet-last kind, or the-loving-couple-with-all-of-the-above-kind (like us), we’re here to help.
1. Find Your Areas of Need
Planning for financial goals may seem scary and like something your parents didn’t start doing until they were well into their 40’s. That’s okay, because they probably worked until they were 65, too. Since that’s not going to be you, you probably shouldn’t have the same habits as them.
Right now, you need to take a look at your financial situation and where you want to be in one year. This doesn’t have to be just financially, but just an overall view of your life.
Check out our FREE 2019 Financial Goals Planning Workbook and start by answering the questions for how you want the start of your 2020 to look.
Now that you have a vision, it’s time to get into the nitty-gritty and find what overall steps you need to get to that end goal.
2. Connect the Dots
You may first ask what the heck kind of goals are financial goals? And how do you set financial goals? And truthfully, they can be anything, really.
We just need to find you the right ones that will help you get to your goals that you outlined in step one. How are you going to live in that house that you want? Or have a full on side business up and running?
Here are some examples:
- Have a 6 month emergency fund
- Fill my Roth IRA ($6,000 max/year)
- Save up for a down payment on a house (SFR or rental)
- Cut our expenses to $24,000 for the year
- Start a side hustle that covers my mortgage every month
- Increase monthly income by $1,000 / month
- Pay off all debt
- Increase credit score to 720
- Partake in a No-Spend Year
3. Make it a SMART goal
Now that you have a general idea of what needs to happen for your 2019, you can hone in on the details of those goals so you can not only ensure you have goals, but that you hit those goals!
Yes, we learned about SMART goals in school and yes they seemed so lame and just took up more of our precious time, but turns out school was right. Who’da thunk… They actually are better.
- Specific – This is the hardest one, Save $100,000 sounds great. But what is it for? Where are you saving it? Where is it coming from?
- Measurable – Dollar amounts usually help in this department
- Attainable – Okay, you probably won’t save a million dollars this year. But maybe you can work towards 25% of your salary.
- Relevant – Don’t save up for a down payment on a house, if you need to pay down your $100,000 in debt first, silly.
- Time Bound – should be easy. By the end of 2019
If you take a look at our FREE 2019 Financial Goals Planning Workbook, there are worksheets for you to ensure each and every goal is a SMART goal.
4. Discuss your Goals with those Closest to You
Talking about these goals out loud is going to help you refine them and make them work with your family and friends. You need to know that they are they going to be able to support you on your path to FI.
For us, this is most key with our friends. Our friends loooooove to spend money, like most Americans. And we, obviously, don’t. Most of the time when they want to hang out, we are going out to eat and racking up the bar tab.
Having this discussion with your friends about your goals for the year will help the process of reaching FI without feeling guilty about not being able to attend all their events.
5. Write them Down
Once you have your goals, whether they are small or large, whether there are 2 or 17, and you’ve discussed them with loved ones, it’s time to write them out.
Writing them out will make them more concrete in your head. Did you write it down and just start laughing? Well maybe you should revisit the A in the SMART goal.
Now post that somewhere! Cheesy? Yes. And trust me when I say, I am not a fan of the cheesy (Mr. TTF tries to pull it out of me sometimes and I just can’t). But this isn’t romantic cheesy, so I think we can do it. Put on your fridge or on your calendar, make it your phone background. Whatever you need to see it, day in and day out because that excitement you feel right now about having 10 no spend days a month, shouldn’t go away 2 months down the road.
6. Build your Mini Goals to Reach them
So, we have our goals and we have them some place we can see them. Now, we need to get from point A to point B. This is honestly the hardest part.. but breaking down the big idea goal into actionable, bite-size pieces is the only reasonable way your end goal is going to become a reality.
You hear about this with fitness goals all the time: you want to run a marathon, so you start small. First, you run a mile, then two, so on and so forth. The same mentality can be applied to your financial health too.
Let’s say you have a goal to save a 6 month emergency fund.
- Find out how much you need to make that fund up.
- What are your monthly expenses? Now for 6 months?
- Break that down into manageable pieces because saving $12,000 seems pretty damn hard when you only have $200 in your checking account right now. However, saving $1000 a month seems like a good goal. Or broken down even further to $231 a week? Maybe start small and do $5 the first week and increase that by $5 each week. You may even get motivated and get there earlier than planned.
This same exercise can be done for any of your goals:
- To Increase your Credit score
- Check your credit score
- Check your credit report
- Make all your payments on time
- Reduce your credit usage to 10% (find the dollar amount)
- Don’t take out any new credit
- Pay down your debt
- To cut spending
- Analyze expenses
- Make a budget
- Have weekly/monthly meetings
- Cut out unnecessary spending
- Shop at thrift stores / yard sales
If you haven’t already, download the FREE 2019 Financial Goals Planning Workbook so you can customize your goals to ensure the start of 2020 is just how you imagined.
Let us know what YOUR financial goals are for 2019 and we would love to hear your creative Mini-Goals as well! Feel free to reach out to us if you need help or have questions on the process and we will be more than happy to help you out, yes one-on-one…
Save on, TTF Family!